Turning a successful business into a franchise is something that needs preparation and is something that can be easily managed if you know where to start.
Check Your Model Is Replicable
Determine whether others can deliver your business to the same standards using written instructions. Where personal relationships are key to delivery or unique circumstances have to be adhered to, document these and address them before proceeding with a franchise strategy.
Protect Your Intellectual Property
Register your trade mark. Lock down your business name and brand. Write down your proprietary business processes and make sure they are owned by you. Most franchisors turn to solicitors experienced in franchising for this work.
Draft a Solid Franchise Agreement
A Franchise Agreement is the legal document that governs a franchise relationship. This needs to be professionally drafted and include matters such as the territory the franchisee will operate in, the amount of the franchise fee and royalty, the quality of service to be provided by the franchisee and the terms on which the franchisee can cease to trade as a franchisee.
Set Realistic Financial Terms
Ensure the financial terms of the franchise (i.e. the amount of the franchise fee and the percentage of turnover on which the royalty is paid) are sufficient to repay the investment of the franchisee but trade able to achieve a reasonable return.
Build a Support System First
The support a franchisee requires to trade must be in place prior to recruitment of them to a franchise. This includes suitable training, a full and accurate operations manual, and a contact to deal with any issues that may arise.
If you are planning a franchise then look to the standards for ethical franchising in the UK. A useful reference for Franchise My Business is www.ashtonsfranchise.com/franchise-my-business/.
By putting these essential elements into place right from the outset, franchising can become a far more straightforward process.
