How to Franchise our business
How to Franchise our business
Thinking of expanding your business, could franchising be the model to use?
The essential element to franchising your business effectively is to have a proven, successful concept that is working well as a business already and comprehensive manuals detailing step-by-step operations of how the business works.
By following these steps, you will have built a solid foundation for your franchise system, which will give it the best chance of succeeding.
The Franchise Business Plan
This will confirm what you want your business to achieve, and as part of it you will need a comprehensive system plan for your franchise. You need to consider how you will finance the following:
• research,
• pilot operation(s),
• support structure,
• recruitment process,
• design and development of the operations manual,
• design and development of the training manual,
• design and development of the franchise sales document,
• design and development of the franchise agreement,
• legal documents ufco, disclosures, non competition agreements.
All of these costs will probably be incurred before you have selected your first franchisee. You will also need to have a long-term view of your growth plans, the operational structure of the business.
1. Franchise Operations Manual
You need to collate the knowledge and experience you and your team have. This is the business, and if you are going to train other people to operate it, you need to know what to tell them. You'll be surprised at how much that seems obvious to you might need to be written down for others to understand. This comprehensive information will form the basis of your franchise operation manuals.
This is the blueprint for a franchisee to run their business. It needs to be comprehensive, setting out everything a franchisee and their staff needs to know to run the business. It may also need to be regularly updated to give franchisees the best chance of success, and maintain the value of your brand.
Technology is helping to streamline this process, there are many low cost solutions available online, simple to uses, low cost franchise templates that have most of the structure outlined, guiding business owners through the path of designing suitable comprehensive operation manuals.
2. Pilot Operation
Although you are already running a business, you need to make sure it will still operate at arm's length.
This will act as a test of the franchise system. It's up to you how many pilot sites/outlets you run, but at least one is essential. This needs to be operating for at least six months, longer if there is a seasonal element to the business. Lessons you learn from the pilot operation will need to be included in the operations manual. They may also make you reconsider whether franchising is the right way forward for your business.
The best way to monitor this is by having an in-house operation that does exactly the same as a franchised operation. This can also be used to test new ideas that could, in the future, be made available to all franchisees for their businesses; for example, new equipment or revised advertising material.
3. Franchise Agreement
The Franchise Agreement governs the relationship between you and your franchisees and is an important source of protection for your business. It will contain potentially hundreds of clauses including the length of the agreement, rights of renewal, obligations of the franchisee and franchisor, termination provisions and what happens in the event of the death, illness or incapacity of the franchisee.
There are a number of companies offering Franchise Documents online. Franchise templates including comprehensive Franchise Agreements, are available for a quick low cost solution.
The Franchise agreement is a legal binding agreement and it is recommended that once you have configured the structure of the Franchise Agreement, you seek legal advise from a Franchise Lawyer who, for a fee will advise you further.
4. Franchisee Sales Document
You need to think about the type of franchisee (persons) you want to be working with. These may be existing businesses that are looking at new opportunities or private individuals who are setting up in business for the first time, but looking for a proven formula to help them get started. Selection of franchisees is critical, particularly in the early stages of the franchise system, as the initial franchisees will form the backbone of your system. Decide what skills you need them to have and develop a profile based on this.
Once again there are many low cost online solutions to implementing the correct franchise sales documents.
5. Franchisee Training
You need to decide what training your franchisees will need, how to train them and who will actually carry out the training.
Having the correct franchise training manuals are a necessity, and there are many resources available online.
6. Franchise Investment Costs
The amount of initial fee payable by the franchisee needs to be clear, and also the level of ongoing payments from the franchisee to you. In addition the franchisee will usually pay the costs of establishing the business or operating unit.
7. Recruiting Franchisees
There are a number of ways of doing this. Specialist magazine advertising, national newspapers which run regular franchising features, franchise exhibitions and the Internet are all potential sources of good-quality candidates. You will need to produce a franchise sales document outlining your system and what is expected from your franchisees, and also establish a recruitment process. Remember you are competing with other franchise systems who are also seeking good quality franchisees.
There are a few online companies who offer low cost franchise templates, including franchise sales documents.
8. Franchise Management and Support Staff
A key role in your network will be that of your franchise management team. They will usually be responsible for selecting franchisees, and providing the ongoing support and guidance that is essential for the franchisees to build their business. The support staff role will vary, but typically will include monitoring franchisee performance and reporting, carrying out credit control and providing technical advice for franchisees. Although it is difficult to generalise, usually one member of support staff is required for every 5-10 franchisees, depending on how complex your franchise system is.
9. Professional Advice
In this age of the Internet, there are many resources available, low cost franchise documents, online templates, and online franchising advice. The more information you have the better you will understand the pros and cons of franchising. Even if you have substantial resources within the business to look at projects like franchising and no matter how well you know your business the more information you have and the more you understand the franchise documents structure, the better your chances of success. The advisers who are likely to be of the greatest value to you are those who have experience in franchising.
Franchise Consultant
Once you have a comprehensive outline of the business and the franchise documents, using a good franchise consultant can bring an extra perspective to your business in addition to specialist knowledge of franchising, and help you decide what is the next step ahead for you.
Accountant
Your own accountant should be able to help with the financial aspects. These will not only include your business plans, but also guidance for franchisees on what they could expect to achieve from a franchised outlet.
Solicitor
Legal advice is essential to protect your business, a comprehensive franchise agreement will be necessary, and you may also need advice on registering your trademarks and service marks. By doing this you should increase the value of your trading name, and afford greater protection for you and your franchisees.
How to Franchise our business - To learn more about this author, visit John Smith's Website.
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How to Franchise your Business - Low cost, step-by-step
Thinking of expanding your business, could franchising be the model to use?
The essential element to franchising your business effectively is to have a proven, successful concept that is working well as a business already and comprehensive manuals detailing step-by-step operations of how the business works.
By following these steps, you will have built a solid foundation for your franchise system, which will give it the best chance of succeeding.
The Franchise Business Plan
This will confirm what you want your business to achieve, and as part of it you will need a comprehensive system plan for your franchise. You need to consider how you will finance the following:
• research,
• pilot operation(s),
• support structure,
• recruitment process,
• design and development of the operations manual,
• design and development of the training manual,
• design and development of the franchise sales document,
• design and development of the franchise agreement,
• legal documents ufco, disclosures, non competition agreements.
All of these costs will probably be incurred before you have selected your first franchisee. You will also need to have a long-term view of your growth plans, the operational structure of the business.
1. Franchise Operations Manual
You need to collate the knowledge and experience you and your team have. This is the business, and if you are going to train other people to operate it, you need to know what to tell them. You'll be surprised at how much that seems obvious to you might need to be written down for others to understand. This comprehensive information will form the basis of your franchise operation manuals.
This is the blueprint for a franchisee to run their business. It needs to be comprehensive, setting out everything a franchisee and their staff needs to know to run the business. It may also need to be regularly updated to give franchisees the best chance of success, and maintain the value of your brand.
Technology is helping to streamline this process, there are many low cost solutions available online, simple to uses, low cost franchise templates that have most of the structure outlined, guiding business owners through the path of designing suitable comprehensive operation manuals.
2. Pilot Operation
Although you are already running a business, you need to make sure it will still operate at arm's length.
This will act as a test of the franchise system. It's up to you how many pilot sites/outlets you run, but at least one is essential. This needs to be operating for at least six months, longer if there is a seasonal element to the business. Lessons you learn from the pilot operation will need to be included in the operations manual. They may also make you reconsider whether franchising is the right way forward for your business.
The best way to monitor this is by having an in-house operation that does exactly the same as a franchised operation. This can also be used to test new ideas that could, in the future, be made available to all franchisees for their businesses; for example, new equipment or revised advertising material.
3. Franchise Agreement
The Franchise Agreement governs the relationship between you and your franchisees and is an important source of protection for your business. It will contain potentially hundreds of clauses including the length of the agreement, rights of renewal, obligations of the franchisee and franchisor, termination provisions and what happens in the event of the death, illness or incapacity of the franchisee.
There are a number of companies offering Franchise Documents online. Franchise templates including comprehensive Franchise Agreements, are available for a quick low cost solution.
The Franchise agreement is a legal binding agreement and it is recommended that once you have configured the structure of the Franchise Agreement, you seek legal advise from a Franchise Lawyer who, for a fee will advise you further.
4. Franchisee Sales Document
You need to think about the type of franchisee (persons) you want to be working with. These may be existing businesses that are looking at new opportunities or private individuals who are setting up in business for the first time, but looking for a proven formula to help them get started. Selection of franchisees is critical, particularly in the early stages of the franchise system, as the initial franchisees will form the backbone of your system. Decide what skills you need them to have and develop a profile based on this.
Once again there are many low cost online solutions to implementing the correct franchise sales documents.
5. Franchisee Training
You need to decide what training your franchisees will need, how to train them and who will actually carry out the training.
Having the correct franchise training manuals are a necessity, and there are many resources available online.
6. Franchise Investment Costs
The amount of initial fee payable by the franchisee needs to be clear, and also the level of ongoing payments from the franchisee to you. In addition the franchisee will usually pay the costs of establishing the business or operating unit.
7. Recruiting Franchisees
There are a number of ways of doing this. Specialist magazine advertising, national newspapers which run regular franchising features, franchise exhibitions and the Internet are all potential sources of good-quality candidates. You will need to produce a franchise sales document outlining your system and what is expected from your franchisees, and also establish a recruitment process. Remember you are competing with other franchise systems who are also seeking good quality franchisees.
There are a few online companies who offer low cost franchise templates, including franchise sales documents.
8. Franchise Management and Support Staff
A key role in your network will be that of your franchise management team. They will usually be responsible for selecting franchisees, and providing the ongoing support and guidance that is essential for the franchisees to build their business. The support staff role will vary, but typically will include monitoring franchisee performance and reporting, carrying out credit control and providing technical advice for franchisees. Although it is difficult to generalise, usually one member of support staff is required for every 5-10 franchisees, depending on how complex your franchise system is.
9. Professional Advice
In this age of the Internet, there are many resources available, low cost franchise documents, online templates, and online franchising advice. The more information you have the better you will understand the pros and cons of franchising. Even if you have substantial resources within the business to look at projects like franchising and no matter how well you know your business the more information you have and the more you understand the franchise documents structure, the better your chances of success. The advisers who are likely to be of the greatest value to you are those who have experience in franchising.
Franchise Consultant
Once you have a comprehensive outline of the business and the franchise documents, using a good franchise consultant can bring an extra perspective to your business in addition to specialist knowledge of franchising, and help you decide what is the next step ahead for you.
Accountant
Your own accountant should be able to help with the financial aspects. These will not only include your business plans, but also guidance for franchisees on what they could expect to achieve from a franchised outlet.
Solicitor
Legal advice is essential to protect your business, a comprehensive franchise agreement will be necessary, and you may also need advice on registering your trademarks and service marks. By doing this you should increase the value of your trading name, and afford greater protection for you and your franchisees.
How to Franchise our business - To learn more about this author, visit John Smith's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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