When you start to look into ways of expanding your business, there are a number of options. One of these is to turn your sole business into a franchise so that other people can open up branches in their areas. A franchised business runs on royalties and franchise fees, which means that, once you have the franchise model in place, you can make money without needing to do any more. There is always a guaranteed revenue stream as long as you have sold the franchises correctly. Check our business advisors if you want to discover more.

If you like the idea of turning your business into a franchise, here are some ways to ensure you are ready and can get started. 

What Is A Franchise? 

First and foremost, what is franchising, and how does the franchise model work? A franchise agreement allows a company owner (the franchisor) the right to operate a business under their brand’s trade name, utilizing their business strategy, tactics, and goods.

The franchisee receives brand recognition, a proven and tested product or service, the opportunity to join a training program, and continuous business assistance in exchange for a franchise fee, start-up cost, and monthly royalty payments. For instance, in the fitness industry, individuals can explore top gym franchises, offering them a chance to operate under a renowned fitness brand. By becoming a franchisee, entrepreneurs receive extensive benefits such as brand recognition, a well-established product or service, comprehensive training programs, and continuous support from the franchisor. This model minimizes the risks associated with starting a new business and provides a pathway for entrepreneurs to thrive within a proven business framework.

However, each franchise is unique; some provide additional perks such as countrywide marketing and the option to attend worldwide franchise conferences or a fantastic, ready-made website complete with the 10 things your company website absolutely must-have. What you choose to offer your franchisees will depend on your business, how much you’re asking them to pay, and even your own preferences. 

Organization Is Key 

If you aren’t organized, selling your franchise model will be difficult. When someone is looking to spend thousands of dollars on buying the franchise for a new business, they will want to buy the best. A disorganized, chaotic kind of business with no set plan is not going to be their first choice – remember, there are thousands of franchises out there for them to choose from. 

Although becoming more organized will take some time, it is worth doing because once you can sell your business as a franchise, you can make money by doing very little, which is everyone’s dream. Even if you decide that franchising isn’t for you, an organized business will certainly run more smoothly, so there are benefits all around. 

The best way to get organized is to develop a business manual of processes, systems, and methods so that not only can you and your employees follow it, but so can anyone who wants to invest in your franchise model. If everyone follows the same rules, it should be difficult to tell the original business and the franchised one(s) apart. 

Build Your Brand 

When you are franchising your business, perhaps the most valuable asset you have is your brand, so you need to build it up and then protect it. Your brand is all about what your company represents, so it needs to be true to you and your original aims – don’t allow it to be bent to fit someone else’s ethos. When you ‘hire’ franchisees, they need to fit in with you, not the other way around. 

Establish clear guidelines around your brand and what can and can’t be done with it. That includes company vehicles, letterheads, your logo and website, and of course, social media. You need to make sure that your company is represented well at all times. The logo is one of the top factors for it, hence thinking it through, and trying out some free logo design tools can come in handy to make a creative and memorable logo. 

Consult An Expert 

Although it may feel as though you can happily go and create a franchised model of your business and put it up for sale by yourself, it’s far better to consult an expert (or more than one expert) about the process. This will ensure that you are going about things the right way in terms of both legalities and practicalities. 

For example, speaking to an attorney is a good idea. You’ll need to complete some important paperwork, including the franchise disclosure document, so having an attorney to hand to go through the ins and outs and make sure you’re doing the right thing is worth the time and money that it will cost. Getting a franchise model of your business right can bring in large profits; get it wrong, and you’ll waste a lot of your company’s capital. Spending at the beginning should reap the rewards in the end. 

It may also be worth contacting a business acquaintance who has already been through the franchise process. You will need to set a pricing structure that makes sense, create a franchise agreement, work out your intellectual property protection, and so on. If you speak to someone who has already been through all of this, it will make things a lot easier and ensure that you don’t miss anything crucial. 

Be Selective 

When it comes to picking the right franchisees for your business, it’s not just about saying yes to anyone who happens to have the right amount of cash for you. You need to be much more selective because whoever you sign up with will be representing your company, and if they aren’t right, they can easily ruin your reputation. They need to be a good fit, and they need to understand and believe in the aims and goals of your company so that they can enhance them. 

Rather than just allowing people to fill in a form online and download a training pack, it’s a far better idea to interview them and ask the right questions. Since franchises are designed to boost your business across the country and even the world, a face-to-face meeting may not be possible, but you can arrange a phone call or Skype or video chat. You should be confident that the person you are going into business with will represent your company in the best possible way. 

Choose The Right Locations

Just as you need to be selective about the people who want to be part of your business, you also need to be careful about choosing the right locations for new franchises. You might want to have a branch in each state or city. You might only want to concentrate on one geographical area because the product you sell is pretty niche. You could even want to go worldwide. Ensure you know what you want to do on this front before you start receiving applications from franchisees because you need to get it right from the start. 

Recruitment And Training 

The recruiting process begins when a prospective franchisee displays an interest in the company and continues until all training is finished. As a franchisor, you should show from the start how you want your firm to be handled, and having a systematic selection process provides candidates with a good first impression.

Develop your idea of the sort of person you want to represent your business before beginning any recruiting activities. Take into account not just their talents and expertise but also their personality. In reality, character and work ethic are often the most significant aspects since you will offer training to applicants to teach them the hard skills required to manage their franchise unit. Of course, your company may demand specialized information that can’t be taught in a short training session. Make this explicit on the application form if this is the case. 

Whatever the nature of your business, you should set aside time to consider who would be the best match for the company. Are you searching for someone extroverted and friendly? Is it more vital that they work quietly and conscientiously?

Once you’ve picked your franchisees, you’ll need to train them. They may not be familiar with your company’s processes and principles, no matter how much industry or management experience they have. Providing a high level of initial and continuing assistance to franchisees will maximize the performance of the franchise unit and boost the overall profitability of the company.

Market The Franchise 

Now that you’ve constructed it, tested the idea, created a franchise agreement, and chosen your franchisees, it’s time to advertise your franchise firm. Most franchisors will want to begin raising brand recognition and cultivating a loyal client base as soon as they possibly can.

This entails launching a brand-wide marketing effort. This will not only attract prospective clients, but it should also draw future franchisees. Offering national – or even worldwide – advertising strategy provides franchisees confidence that they will benefit from high levels of brand awareness without having to lift a finger.

You may choose to establish a marketing cost after determining how you’ll organize your long-term marketing activities. These, like royalties, can be collected as a flat charge or a percentage of sales, although they are typically set at less than five percent of a franchisee’s total income.

Monitor The Situation 

What you really don’t want to do is to sell your franchise and then not check in from time to time. Although franchising your business does allow you a lot more freedom and will bring you more money, if you don’t keep up with what’s happening with your franchisees and their businesses, you might miss something important. 

Using monitoring to find out how each branch is doing will help to keep you up to date and on top of any issues before they become too large to deal with properly. The smooth running of your franchises is essential for success, so you do need to keep on top of them all. This kind of monitoring will also allow you to see how profitable each section is becoming and will show you where to target for additional training, for example.