You’ve seen the ads: “Great opportunities in franchising can be yours today!” Sound intriguing? Franchising is a favored child of the free market system. You come up with a great idea, make a bundle, then sell it to others so they make even more. Sounds easy, but synthesizing aspects of your operation so they make sense to others has been known to send successful business people in search of antacids. You can avoid making too many mistakes by following these guidelines. Get your franchise off the ground, and as a bonus, you’ll have the chance to witness others enjoying a share of the success you’ve built.
Items you will need
- Unique business idea
- Franchise operating plan
- Franchise broker (optional)
Investigate all aspects of the franchising field as they relate to your enterprise. Visit trade shows and talk with people who have been on both ends of a franchise deal. Consult with your attorney, accountant, business manager and/or anyone else you can count on for opinions about the viability of duplicating and licensing your business concept.
Hire a franchising consultant to conduct a feasibility study. Expect to pay a hefty fee for this service, so don’t be shy about asking consultants for examples of studies they have written in the past so you can feel confident about choosing the right one for your situation.
Choose a consultant, sign his contract and begin the critical work of synthesizing and committing to paper every aspect of your brand. This "operating manual" is the bible by which strangers will replicate your business, so its importance can’t be overstated.
Hire an intellectual property lawyer to protect all of the original ideas, concepts, goods and methods that make your business idea unique. You may be required to seek trademarks and/or patents to protect formulas, production secrets and systems that will be included in the franchise agreement.
Ask your lawyer to draw up the franchise agreement or get a franchise attorney to do the job. Every detail must be carefully stated. Will you employ the Hallmark model and mandate every aspect of a store’s appearance and operation? Or will you be like McDonald’s, which employs strict oversight on menus but allows franchisees to design their own restaurants?
Begin searching for buyers once you’ve packaged your enterprise. Start with the Internet and let a search engine introduce you to sites devoted to matchmaking. Attend franchise shows. Consult with franchise brokers. Like job headhunters, brokers are trained to separate window shoppers from buyers. You will pay a fee to use one, but a broker can save you time and money.
Monitor your first franchise closely to evaluate its health while knocking out the bugs in your franchising agreement. Decide if you want to keep going. Multiple franchises can be burdensome if you don’t employ someone to manage them. On the other hand, the more satellites you own the more exposure your ingenious idea receives--so this could be your chance to become a mogul.