Starting a franchise can be a lengthy and challenging process, but if done properly, it can elevate your business to new heights.
To help you navigate some of the challenges faced by new franchisors, we’ve assembled this comprehensive guide covering everything you need to know to get started.
Let’s dive in!
1: Is Your Business Right for Franchise Development?
While franchising can be a lucrative opportunity for both you and your potential franchisees, it may not be suitable for every type of business. It’s essential to consider three main factors before making a decision.
First, is your business model replicable in other regions? Franchises are sold by territory and you want to ensure that your business can be successful in a wide range of locations. Even if your initial location is successful, you want to make sure other locations are successful, too. If not, you might be setting up franchisees for failure.
Next, consider how easy it is for a franchisee to learn how to operate your business. It’s important to have streamlined every aspect of your business before franchising, and the overall complexity of the business model should also be assessed.
Finally, can your product or service be easily duplicated? If your business relies on unique production methods or specialized services, making a franchise that relies on the same thing might not be a good idea.
However, if your business can be replicated anywhere, franchising should pose no significant challenges.
2: Develop a Support Plan
Creating a franchise involves more than allowing people to open locations under your brand. You have to put effort into each franchisee’s location, too. Your franchisee’s success is directly related to yours. Their failure can tarnish the overall reputation of your brand.
Before you move on with the process of starting a franchise, you need to have a support plan in place. How are you going to help franchisees succeed?
Will you handle the development of a supply line, provide training, offer various tools and equipment, ensure qualified tech and repair services are available, or do other relevant things that will boost your franchise business?
You don’t have to do everything, but a franchisee does want to know that you’re going to support them in exchange for them living up to their end of the bargain. You need to balance this support plan in a mutually beneficial way.
You want to empower your franchisee to make decisions that are right for them but also provide tools so they don’t feel abandoned and left to their own devices. Look at other top franchises to get ideas for what you can do to support your franchisees.
3: Write Up Your Franchise Disclosure Document
Every franchisee you allow to come on board is going to need a franchise disclosure document. This is kind of like a business contract. It outlines the details of the deal and holds both you and the franchisee accountable for various things.
Some of the information most commonly put in the disclosure document includes the fees you plan to charge, the support plan we talked about, obligations for both sides and performance requirements.
This document has to be given to all potential franchisees at least 14 days before they sign anything. It’s a critical step and shouldn’t be taken lightly.
4: Make the Operations Manual
Franchisees require a comprehensive operations manual that guides them through the process and ensures they understand how to run things.
This will look different depending on what type of business you’re operating. So, we can’t provide you with a generic outline that covers most of the basics. Your business will need to be looked at in-depth before making an operation manual. Any process that you have streamlined or formulated along your business’ journey should be included in your operations manual. This can include how to hire employees to handling difficult customers.
5: Register Trademarks
You’ll have new trademarks that you need to get registered before you start letting franchisees open up new locations. It’s best to get this out of the way now and protect your IP before you bring new people into the fold.
Your existing trademarks might also need to be changed or accounted for in your franchise agreement.
6: Launch the Franchise
With the groundwork laid, it’s time to launch your franchise and get business owners to invest in opening their franchise locations. Consider factors such as profitability, support plans, fees, and ease of entry when promoting your franchise. Effective marketing is essential to attract investors and communicate the benefits of joining your franchise network.
If it’s not a great deal that’s mutually beneficial, it’s not likely to get as many investors to climb aboard.
Marketing is also a big part of getting the franchise established. Potential franchisees need to know the option exists, and they need to know how it will benefit them if they do go through the effort of approaching a deal with you.
How to Start a Franchise Business with Slick Marketers
Now that you are familiar with the process of starting a franchise, let’s emphasize the importance of effective marketing.
Marketing your franchise is crucial to making it a success both to help your future franchisees and building your brand. Luckily, you don’t need to do it alone.
Slick Marketers is dedicated to helping business owners just like you to start franchises successfully.
Our franchise marketing agency can help you work out the kinks in your franchising plan, and we can handle the marketing aspects to make sure you get the investors you need to succeed.
Contact Slick Marketers today to learn more.