The 10 Steps to Becoming a Franchisor
- Determine if your business is one that can be franchised
Conduct a feasibility study to evaluate scalability, national demand, and profit for franchisees.
- Make sure you have the time and money
Be prepared to take a step back from your current business, and anticipate an investment of between $100K-$400k.
- Surround yourself with professionals
At the start-up phase, at a minimum you will need an expert franchise sales person, Operations Manager, Training Manager, and a franchise attorney. Keep in mind that the, if you have a well-rounded franchise expert on board, they may be able to wear many hats (such Training, Support, and Operations). Another option is enlisting a franchise consulting company; often you will get a full team for less than a single executive salary.
- Document everything
From the time the lights go on until they go off, every step of your business including marketing, employee management, product merchandising; everything you can think of should be put into a process guide. This will later become your Operations Manual. Again, a good franchise consultant or Operations Consultant can help you with this.
- Determine the offering
Decide how much control you require on your look and feel, what your involvement will be in the supply chain, your fee structure, etc. This is the most complicated part of becoming a franchisor.
- Develop a growth plan
Evaluate if local, regional, or national growth is the right initial approach and how many new owners can you support in a month.
- Develop a marketing budget
Use your growth plan to develop a budget. This will typically include franchise brokers, franchise portals, exhibitions, as well as organic and paid web traffic.
- Create a comprehensive, defined mutual evaluation process
- Design your training, onboarding, and support processes
Be careful! Your first 2-4 franchisees will set the tone of your system for years to come.
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If you were searching for "The 10 Steps to Become a Franchisor" because you are enjoying success and ready to take the next steps in your growth, GREAT!
If, however, you are finding your business stagnant or moving backwards, now is definitely not the right time for franchising. It may, however, be the right time to consider bringing in capital to get back on track. If you would like to discuss how we can help you fund your business, feel free to either schedule a call with our funding expert, who operated a world-wide funding organization for many years and has 55 years in the alternative lending business. You can also check out our website that is specifically dedicated to getting funding during and after the COVID-19 pandemic.