The 10 Steps to Becoming a Franchisor
This is the basic path: determine whether the business can be franchised, make sure you have the resources, build the right team, document the model, define the offering, plan growth, budget marketing, create the mutual evaluation process, design support, and execute carefully.
- 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 salesperson, Operations Manager, Training Manager, and a franchise attorney. Keep in mind that, if you have a well-rounded franchise expert on board, they may be able to wear many hats, such as 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 you can 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
Your franchise sales process should tell candidates what happens next, tell your team what to do next, and protect the brand from awarding franchises to people who are not the right fit. - Design Your Training, Onboarding, and Support Processes
The first franchisees will learn the system from the structure you build now. Training, onboarding, and support should be designed before growth starts, not invented after the first few franchisees are already frustrated. - Execute
Be careful! Your first 2-4 franchisees will set the tone of your system for years to come.
Are You Considering Franchising?
We should connect if you are serious about franchising and want to know whether your business, team, capital, documentation, and sales plan are ready for the jump. There’s nothing to lose but questions, and everything to gain by investing 30 minutes before you start spending real money in the wrong order.