How to Franchise a Business

The Services and Process of Franchising a Business for Start Up Franchisors

The first step in determining whether or how to franchise a business involves two key questions:

1. Is this business franchisable?
2. Is franchising the right strategy?

These questions can only be answered after evaluating your business and determining how franchising fits with your specific goals and objectives.

The iFranchise Group provides all of the franchise consulting services listed below, and can customize a program to meet your specific needs and budget. Call us today at 708-957-2300 to see how we can help franchise your business.

STATEGIC BUSINESS PLANNING. If the decision to franchise a business is made, a franchisor should develop a business plan outlining the company’s growth and strategy for the next five years. A franchisor needs certain new capabilities and will need to be sure that these capabilities are seamlessly integrated into existing organizational functionality.

FRANCHISE OPERATIONS MANUALS & TRAINING PROGRAMS. To ensure successful franchisees and maintain quality control, the franchisor will need to develop a state-of-the-art operations manual for its franchisees. This manual will serve as a sales tool demonstrating franchisor competence to new prospects, as a training guide for new franchisees, as a reference guide for established franchisees, as a “liability limiter” for the franchisor, and as a legally binding quality control device for the entire chain.

The franchisor should also develop training programs for use in conjunction with the operations manual. Computer-based tools and programs are highly effective, as are training videos, and can be used for the franchisee, for the franchisee’s employees, and for corporate employees.

LEGAL DOCUMENTS. To be legally entitled to sell franchises, the franchisor will need guiance on developing a franchise agreement and a FDD (Franchise Disclosure Document), and will need to file with appropriate state authorities on a national basis (23 states have such requirements). The franchisor will also need to maintain ongoing compliance (keeping registrations in force while actively selling) and will need to be able to document compliance with state and federal law on an ongoing basis. These legal requirements are relatively easily met through the use of an attorney with substantial franchise experience. (Companies seriously considering franchising are well advised to seek the counsel of a knowledgeable franchise professional prior to initiating any franchise efforts. Read more on the importance of having outside independent franchise legal counsel).

FRANCHISE MARKETING PLANS. Of course, the new company will also need to sell franchises. This will require a specific marketing plan designed to get the franchisor’s message to the targeted franchise prospect.

FRANCHISE MARKETING TOOLS. Once the prospect has been identified, the franchisor will also require marketing tools to assist it in the sale of franchises. For aggressive sales campaigns, the iFranchise Group would recommend the development of a mini-brochure (for use in direct mail campaigns and perhaps as a give-away at trade shows), a full-size franchise sales brochure, and a franchise sales video.

FRANCHISE SALES TRAINING. And of course, the franchisor will need to understand the nuances of the sales process and the legal constraints of franchise sales.

The tools necessary for franchising a business can be developed in approximately three months from the completion of the implementation plan, although state registrations may delay a company’s ability to sell in certain states for another three to four months. Altogether, a new franchisor can anticipate that the franchise program should take between six months and a year to fully implement. The cost of a well-designed program varies substantially, depending on the strategy chosen and the desired speed of expansion.

View a full list of franchise consulting services we offer, or contact us to learn more.