Franchise Your Business: What do you need to launch a new franchise system successfully?
In order to franchise your business, there are several elements to a franchise development program which must be in place prior to launching a new franchise system.
1. A good business plan that itemizes the key elements of the franchise expansion model and how the franchise program will take shape. The plan should be as realistic as possible and take into account conservative growth and higher costs than expected to support the franchisees.
2. In order to franchise your business effectively, you should have a good understanding for the marketplace, and the franchise concepts you will be competing with. Know there fee structure and key points to sell against when speaking with potential franchise buyers.
3. A solid understanding for franchise law and a well drafted UFDD are critical to the ongoing success of a franchise program. These documents are not only required by the FTC, but also by many of the states and provinces you will be selling your franchise throughout.
4. To franchise your business, you should have well documented operating systems and procedures that can be taught to a franchisee effectively. The franchise operations manual should protect the franchisor from liability and provide the franchisee with a valuable reference tool.
5. A franchise marketing program that generates leads effectively and efficiently is the final piece of a good franchise development program. Create a good value proposition and deliver it with a punch. Potential buyers need to get the message immediately in order for you to effectively sell franchises.
6. In order to successfully franchise your business, there is one critical variable that should be in place that allows you to leverage throughout the sales and development of your franchise. The “IT” factor, your business either has it….or it doesn’t. What is it that separates you from others in the industry? Why should someone pay you a fee for your idea and concept when they could start a business on their own? Good franchises have a great selling proposition, something that can be leveraged and offered to a franchisee in another part of the country. Either you’ve got a great new idea or a better mousetrap, but you need to create a compelling reason for someone to join your company with their investment in a franchise.
Franchising can be related to the options market in some ways. It is a leveraged expansion model that scales a business system. If there are problems or cracks in the system, the replication of this model will only reproduce negative elements of your business. Have the system figured out and the “IT” factor in place before you franchise your business.