So you’ve thought about forming a franchise but you may not be fully aware of what that entails. How do you go about starting the process and what kind of process is that anyway?
Many business owners decide to head in this direction because franchising provides them with the opportunity to increase their business venture through corporate development by way of a network of branches all devoted to offering the same product or service across a wider range of locations.
Financial considerations are also a large part of why business owners decide to offer franchisees the capability to get in on the ground floor and invest their money for a chance to be part of the network within a system. Building that network can take time but, in the end, the franchisor and the various franchisees who offer a financial benefit in the form of startup costs and royalty fees can each benefit equally from the arrangement.
The agreement that is made between the franchisor and the franchisee allows for the brand or company to thrive as it expands and, before long, it can become a popular, trusted, and even beloved household name that will attract customers in droves.
But how do you get started down this path to lucrative success? What makes people want to get into buying a franchise? We’re going to break it all down for you right here.
Design an Operational System
What kind of business do you plan to run and how do you expect it to operate? That needs to be fully defined from the start or you risk too little consistency among your franchisees. In order to ensure and maintain a level of top-shelf quality control, you must establish a standard by which all of your branch locations will operate.
Therefore you must create a normal method of protocol, training apparatus for new owners and employees, examples of the best possible version of the product, create a uniform or dress code to which all workers must adhere, and routine of operations that should define the business in full. A good franchise is one that maintains steady uniformity.
The goal, of course, is to offer the same product or service at every location, no matter what. This is only achieved when the system is well-thought out and firmly established up front.
Hire Legal Representation
You knew it would come to this eventually, so let’s address it now. Getting an attorney to help you form your franchise is absolutely imperative because of the various documentation and other legal steps that will need to be taken as you embark upon this process. You shouldn’t be filling out the paperwork by yourself, things like Franchise Disclosures and Franchisee Agreements can be complex documents.
Working with an attorney can also be helpful in setting prices and fees and taking the proper steps towards protecting your products and other intellectual property that are essential components of your business.
Creating a Franchisee Agreement
One of the fundamental parts of offering franchisees the opportunity to buy in is the Franchisee Agreement. This is the documentation that outlines all of the major deal points and expectations that are to be met by both parties on each side. It’s basically a contract that establishes all fees that will be paid, the responsibilities being assumed by the franchisee, and the standards by which the franchisee is expected to offer the products and/or services that are synonymous with the brand.
For example, if you buy into a Chem-Dry Franchise you will sign an agreement that outlines everything you will be mandated to do in order to uphold the standard of quality that a customer anticipates when they call for that service.
As a franchisor, you are putting your trust into the franchisee to uphold the level of customer satisfaction the brand offers. For the franchisee, you are giving your word that you will operate the business within the company’s strict operational guidelines without making any adjustments or changing the service in any fashion.
That’s why this Agreement is so important, it’s a legal contract outlining all mandates that must be complied with under penalty of fines or forfeiture of the business.
Selecting Franchisees and Locations
These are the lifeblood of your franchise so choosing the best in both categories is only going to make your business grow and thrive in the way you imagine. The regions you identify can be done by thinking about where you can easily travel and then widen your circumference as the brand and the business expand.
Good organization and forethought are the key components to finding the best candidates by researching each one carefully and fully. Make sure they have the financial stability and security to get their franchise up and running for the long term.