How to franchise your business in 7 steps
Franchising a business can be key to success. It has proven to cause rapid growth and dramatic expansion. However, until you reach this point, the process is extremely time-consuming and must be done right in order to see positive results. Here we detail the seven steps to franchising your business. Follow these steps, and your dream of seeing your business as a household name might just come true:
Step one: deciding whether your business is ready to franchise
If you attempt to franchise your business before it is ready, there’s only a slim chance that you’ll succeed. There are a number of factors that must be considered before you decide to take the next step.
Believe it or not, most franchises for sale tend to have a fairly simple concept. If your business is too niche, it’s likely that not enough people will be interested in your services or products. The most successful franchises have a familiar idea, but with some kind of original twist.
Finance is also an essential consideration. The majority of franchises that are successful tend to already be profitable and are simply looking to replicate this success in other units and areas. The best way to decide whether this is realistic is to do thorough market research. Find out where there is a demand for your business and whether there is room for you in the marketplace. It’s no secret that franchising can be a profitable industry. In fact, 97% of franchises in the UK were profiting in 2019.
Step two: learning the legal obligations
The legal requirements for selling franchises will vary across countries. If you’re looking to sell within the UK, it’s important to make sure that you’ve researched the laws that you’ll need to oblige with. If in doubt, it might be a good idea to consult with an expert in the field.
Step three: formulating your business model
In general, you need to be up to speed on your business model before your business can be successfully franchised. You’ll also need to make important decisions about how you plan to operate your franchise. Many of these decisions will need to be made while you’re considering the legal paperwork, and are likely to have a major impact on the profitability of your franchise.
Things to bear in mind are:
- Royalty percentage and franchise fees for any potential franchisees
- The terms of franchise agreements
- The areas in which you are looking to open franchises
- The training programs you will offer to franchisees and how long this will take
- Whether franchisees will need to buy their own equipment and products
- Whether your franchisees will require business experience
- Your marketing strategies
- Whether you are looking to master franchise
Step four: registering as a franchise
Your legal paperwork should be ready to be submitted as soon as you have made these decisions regarding your business model. This may involve a higher power critiquing the document, in which case, you may be required to disclose more information if they deem it necessary. Once your paperwork has been approved, you are considered the official owner of a franchise.
Step five: hiring any key employees
Your franchise units will be managed by a franchisee. Within their individual business, they will be in charge of hiring and managing staff. However, as a franchiser, you’ll need a team of people who are dedicated to helping these franchisees, as you’ll be required to assist them in all aspects of the business. If your franchise is as successful as you hope it will be, this is too big of a job for one person. It’ll be down to you to decide what expertise you want these employees to have, but they might include training, marketing, and software. The more your franchise grows, the bigger the team you’re likely to need.
Step six: start selling your franchises
Now to one of the most important steps – convincing franchisees to invest in your franchise. The initial fee of a franchise can dramatically vary, but a study by the British Franchise Association finds the average to be around £40,000. Make sure that your salespeople know the ins and outs of your business, and are able to convince potential franchisees that you’re a risk they should be willing to take. Look out for any franchise fairs you can attend, and make full use of social media and all its benefits.
Step seven: providing full support to your franchisees
While the process up until this point may have seemed long, this is the make or break. Running a successful franchise needs to be a team effort, and your franchisees will need as much support as possible. As they have a personal stake in the business, you can expect to gain their full support back. Make sure that your training procedures are thorough, ensuring that customers will be provided with uniform support across all units of the franchise.
For more information, contact us at Infinity Business Growth Network franchise consultants UK.