How to Franchise

1.  Preparation of the franchise legal documents
2.  Writing an operations manual
3.  Developing a marketing program
4.  Advertising the franchise program
5.  Selling the franchise
6.  Managing and supporting the program

Franchise legal documents

In order to sell franchises it is necessary to first have a Franchise Disclosure Document (FDD) and Franchise Agreement.  These are parallel documents that mirror each other.  The FDD explains, in everyday language, the details of the franchise program, while the Franchise Agreement is written in legal wording, and is what actually binds the franchisee to the program.  The FDD must be written in a very specific format, in a prescribed order, and must contain the exact disclosures as required by the Federal Trade Commission.

There are "do-it-yourself" packages for the preparation of these documents, but in our view, this is a poor way to develop franchise documents.  Preparation of the franchise documents involves correctly establishing many program variables, the disclosure of much detail, which comes from several hours of interaction with the person preparing them.  You do not want to make a mistake with your franchise documents.  New franchisors need advice, direction, consulting, and assistance from someone who has extensive experience in the preparation of franchise documents.  This may be a franchise consultant or a franchise attorney.

The Operations Manual

Franchisors are required to provide training to their franchisees, and are required to give an Operations Manual to the franchisees, normally at the time that training begins.  The Operations Manual should be written to the "least experienced" franchisee, and should contain, at a minimum, sections about the franchisee's relationship with the franchisor, opening the business, operating the business, the procedures specific to the industry, recommendations and guidance for hiring employees, and a series of operational and franchise forms for the daily function of the business.   The Operations Manual is normally prepared by a franchise consultant.

Marketing Program

You will need both electronic and printed response materials.  There are certain successful norms that have been established in the franchise industry for the type of materials used.  You can obtain some samples from franchisors, decide on your own approach, and then hire a photographer and graphic designer to prepare materials for you.  It is not necessary to spend a large amount of money on this part of the program, but the materials should look professional and should convey your message.

Advertising the Franchise Offering

There are many ways to advertise a franchise program.  In the past, newspapers and print media were the main way to generate leads, but these vehicles have become less effective.  Over half of franchise inquiries now come from the internet.  The problem is that there are hundreds of internet sites offering franchises, and franchisors receive many casual inquiries from people who simply "check a lot of boxes" on one or more sites, indicating interest in many different franchises. 

We suggest that you establish a budget, perhaps a few thousand dollars a month, depending on your development plans, select a few internet sites, and then be prepared to receive a lot of "chaff" in which there will be some qualified leads.  It has been estimated that one internet inquiry in 60 actually buys a franchise.  However, you cannot ignore the internet when selling franchises.

You should established a Google Ad Click advertising program to specifically push your franchise offering toward those seeking something similar to what you do.

You may consider exhibiting at franchise shows, but you will probably find this to be quite costly, and you may obtain a greater number of inquiries, per dollar, with your own advertising program.

Selling Franchises

It is desirable to sell franchises yourself, if you can.  If you need assistance, there are many franchise brokers in the industry to assist you.  Some of them only generate qualified leads, while others actually become involved in the sale process.  Be careful not to pay too high of a percentage of the franchise fee as a commission.  If the commission paid is too high you may have insufficient revenue remaining to adequately train and support the new franchisee during their start-up period.

Managing and Supporting the Program

Good franchisors do everything possible to help their franchisees be successful.  Each franchisee needs access to a franchise consultant, who represents or works for the franchisor, to help them with day-to-day problems and questions.  In the beginning the franchise owner or existing staff may serve in this roll.  As more franchises are sold, it will be necessary to hire someone.  Your staff does not have to be large and just a few people can support several dozen franchises. 

We will be pleased to provide additional information about any of the suggestions outlined here.

More information can be found at:  www.biltmorefranchise.com