Business owner’s dream of seeing their brand become a household name, with a network of franchisees around the globe. It can be a great expansion strategy that doesn't require as much up-front capital as growing through company-owned units when the right concept is franchised effectively.
There are several steps to franchising a business. Analyzing your business model is the first step in franchising an existing business opportunity. Find out whether your business is profitable after allowing for your franchise fees and if it is profitable and has well defined objectives to exploit the opportunities in the market place.
The next step is to assess whether the business model be easily taught. There is no point in having a profitable business opportunity if it cannot be duplicated by your franchisees. A training package must be devised that assumes that the franchisee has no prior business experience.
You will need to create a franchise operator's manuals, brochures, online presentations and marketing programs in the next step. A company that has a long history of advising new entrants to the franchise market will be invaluable at this stage and will make your entrance to the franchise market a lot quicker and hassle free.
Next step is to decide on the initial franchise fee and the ongoing royalty payments. During the initial stages of launching the business franchise, the franchise fee will have to be kept at a very low level to entice the first batch of franchisees. Once you have some franchisees running successfully then you will be able to increase the initial payment. The first few franchisee are essential to the success of the company as their performance will decide whether the company can provide successful and lucrative franchise option for others.
One of the important steps to franchise your business is the compiling of a franchise agreement. It is an important document that defines the level of quality and service you need to maintain. Franchising an established brand or company is a huge responsibility for the franchisee and a great risk for the franchisor; no one wants to spoil their good image and name in the world of business by sharing it with an irresponsible party. This is one reason why franchise agreements are prepared and signed by both franchisor and franchisee.
In order to prepare a franchise agreement, you have to look at a proper franchise agreement sample. This helps you to understand the particulars of your business. In addition to that, it reduces the risk percentage for both the trading parties. You can find a good franchise agreement template to get a sample. However, since this document will define each aspect of the business, the responsibility of the franchisor and the franchise it is of utmost importance that the document is studied and prepared carefully after several sessions of brainstorming so no aspect of the business process remains ambiguous.
Basically, the franchise agreement template can be used in two ways – without any efforts for the modification, you can use the sample document in preparing a generic document.However doing so is definitely not advisable as each business will have points unique to it apart from the generic ones mentioned on the sample. So, it is important to customize the format according to the requirements of the particular business.
One of the smartest moves you can make to ease the transition from business owner to franchisor is to add a franchise consultant to your team. Consultants can help you establish your initial business plan, help iron out any questionable details or omissions, and design the best proposal to present to the marketplace.