How can i franchise

Most franchisors will tell you what their opening inventory requirements are. Working Capital For rent, you may be required to deposit first and last months' payments as well as a security fee. You'll also have to pay a deposit to the electric, gas and telephone companies who will want deposits prior to giving you service. You'll need some working capital and money in the cash drawer to make change.

You'll need money to pay your employees. You'll need money just to operate until there's a cash flow. If you're buying a franchise that relies on charge accounts, you're going to have to allow yourself some additional capital before the bills are paid by the customers and returned to you. Advertising Fees There is usually a fee for advertising on a regional or national basis. Most larger franchisors require their franchisees to pay a certain amount into a national fund used to advance the concept.

The upside is the benefits are quite substantial in terms of the visibility you get with the type of advertising that most franchisors do. An important protection for the person planning to buy a franchise is the FTC's Franchise Rule, put into effect October 21, The rule requires covered franchisors to supply a full disclosure of the information a prospective franchisee needs in order to make a rational decision about whether or not to invest.

This disclosure must take place at the first personal contact where the subject of buying a franchise is discussed and at least 10 business days prior to signing any contract with the franchisee or accepting any money. This is a "cooling-off' period intended to prevent franchisees from jumping in without carefully reviewing and considering what they're doing. This means a franchisor, franchise broker or anyone else representing franchises for sale has to present a disclosure document-the Franchise Disclosure Document FDD -containing extensive information about the franchise.

Furthermore, you must be provided with completed contracts covering all material points at least five days prior to the actual date of execution of the documents. Again, this provides another cooling-off period and the chance to have an attorney review the contracts prior to execution. The FTC doesn't require franchisors or business opportunity sellers to register with it or any other government agency.

However, several states do have registration rules requiring franchise sellers to register. Some of these states laws are tougher than others, but most have adopted the FDD guidelines for their disclosure requirements. It would be a mistake, however, to assume that simply because a franchise is registered with a state or provides some type of full disclosure document, you as a consumer are going to be protected from the possibility of failure or rip-off. The only thing that a state reviewing agency can do is ensure that the franchisor has responded and filed the necessary documents.

Albert Santalo. Franchising is regulated and requires compliance with federal and state franchise laws. You are required to give prospective franchisees your FDD no less than 14 days before signing any agreement with a franchisee or accepting any payments from a franchisee. This includes information about royalties, territories, start-up costs, and more. Your FDD has to be updated at least annually.

In franchise registration states, the FDD must be approved and registered with state regulators before you can offer or sell a franchise in that state. There are also some states that require franchise filings or business opportunity filings before you can sell a franchise. Learn more about when an FDD expires and must be updated. When you franchise your business it means that you have taken the necessary legal and business steps to sell franchises, support franchisees, and grow your brand.

First and foremost, your franchise lawyer will have to prepare and issue a Franchise Disclosure Document that complies with federal and state law. The following are the steps to franchise your business:.

The franchise development process typically takes between to days to go from where you are today to being a franchisor legally able to offer and sell franchises. The answer depends on where you will be offering and selling franchises. At the federal level, the FDD is not registered or filed with a government agency.

At the state level, in the franchise registration states, your FDD must be registered with the designated state regulator before you can offer or sell a franchise in that state. In the franchise filing states, you must make certain filings with the designated state regulator before offering or selling a franchise in those states.

In all other states, you may offer and sell franchises as long as your FDD is current and in compliance with federal law. Also, learn more about where the FDD gets registered and filed. Typically, franchising your business takes from 90 to days.

Depending on unique factors related to your business or industry, there could be variations. A lot also depends on who you are working with and your internal team. Stage 1 — The Franchise Development Stage is the franchise development stage where you take the legal and business steps necessary to call yourself a franchisor and start selling franchises.

During the franchise development stage, major milestones include developing and issuing your FDD, preparing your operations manual, and competitively benchmarking your franchise offering relative to your competitors. It depends on who you work with and whether or not they are focused on a long-term relationship and honest pricing. Be very careful when selecting a lawyer or franchise developer.

For many good reasons, including your legal protection, accountability, and the need to maintain attorney-client privilege, your franchise lawyer must be independent and directly retained by you.

You need to know that professionally they stand behind the legal advice and guidance that they provide to you. Other costs include developing your operations manual. Many of our clients prepare their own operations manual. The Internicola Law Firm, P.

Tip : Do your research and look for transparency before engaging a team to develop your franchise. Ask for a detailed proposal and client references! Learn more about the franchise development stages and how much does it cost to franchise your business. There are a lot of moving parts involved in selling your first franchise and building a pipeline for ongoing franchise sales. As you get started developing a franchise sales marketing plan, the following are some of the initial questions that you should be answering:.

The answers to these questions will allow you to start building the framework for your initial franchise sales marketing plan and the positioning of your brand. This is one of the most significant marketing tasks that you must engage in. Even if you are working with a marketing team, as the founder or leader of your franchise brand, you need to be actively engaged in this process or you risk making one of the most common and costly marketing mistakes that start-up and emerging franchise brands make.

This mistake will cause you to waste your marketing dollars, lose franchisee conversions, and make bad decisions about the effectiveness of franchise marketing channels available to you.. In fact, this mistake is made by a majority of franchisors and is the reason why the marketing for so many franchise brands — no matter their industry — sounds the same.

While the larger franchise brands have the money to get away with making this mistake, start-up and emerging franchisors like you do not.

In fact, many times they help to perpetuate it. The mistake is that emerging franchisors like you start spending money on marketing — whether pay-per-click ads, franchise sales web portals, joining broker organizations, attending trade shows, etc. Developing your brand story and a unique value proposition for your franchise brand takes time, so get started now. For additional information about positioning your brand, we strongly recommend that you read Building a StoryBrand by Donald Miller and that you check out the StoryBrand workshops.

Once you have established the value proposition of your brand and created your brand story, start evaluating these franchise sales marketing channels. Some of these channels may be right for your franchise and some may not.

Contact Form You always want to give users the opportunity to fill out their information and contact you right away. Your contact form needs to be easily found. Initially, you may only want to ask prospects for basic information name, email, states they are interested in opening a franchise in.

How do you get prospective franchisees to give you their information? Give them a downloadable copy of your Franchise Opportunity Guide. How will your franchise transform the lives of your perfect franchisees and help them achieve their financial goals? Remember, stay away from typical differentiators and stand out from the crowd. Start off with a solid base and build up your site over time. Franchise Opportunity Guide Some people refer to this as a franchise brochure.

Basically, it should be a digital guide about your franchise offering that prospects can download or print. You can hand these out at trade shows, such as the International Franchise Expo , and should have them readily available for good prospective franchise buyers.

Video According to WordStream , there are staggering statistics that prove video is key for websites. By Richard Holden, Lloyds Bank. There is no set cost for franchising a business as each business is different and setting up the franchising system will be bespoke to your own individual requirements. Some businesses are more complex and require more outsourced professional advice and guidance whilst others are simply structured and with the right support much of the work can be taken on by the owner reducing the potential development costs.

Additionally, you would need to budget for franchisee recruitment costs such as advertising, exhibitions etc. Your existing business may incur additional costs in setting up a support structure which may include recruiting additional staff and developing a website for the franchising side of the business.

These development costs need to be made before recruiting your first franchisee so there is a significant capital outlay before you can begin franchising.

Banks are on hand to assist with these development costs. Help and Support It is strongly recommended that you use the services of British Franchise Association affiliated advisors for the development of your franchise model and legal documentation. Costs will be individual to your own circumstances although a good consultant will be able to offer some guidance according to your own needs. The more development work you do yourself the lower the consultancy costs will be however that assumes you have the expertise and the time to develop the necessary systems.

W hy use a franchise consultant when franchising your business. Franchising is not something that can be learnt overnight and so when deciding to franchise your business, you will require the services of a franchise consultant. This consultant should be a member of the British Franchise Association bfa , and hence have a proven and successful track record in franchising. The franchise consultant will use their experience to help you build a sustainable franchise model and will navigate you through each step of the franchising journey.

Whether you are a small to medium sized business or a corporate organisation, franchising is continually proving to be a robust and effective growth strategy, even in these challenging economic conditions. What does it take to develop a franchise business? Developing a successful franchise proposition requires you to satisfy a number of key criteria such as: have you proven and piloted your concept already, do the figures stack up, does your business proposition have longevity and so on.

Franchising your business also requires you to transform and document your business into a series of organised systems and procedures that can be replicated by others, as well as the implementation of a strong training and support infrastructure that will ensure your franchisees follow your systems and maintain brand standards to the letter from day one.

Short cuts now can often lead to expense in the long term! It is therefore hugely important that you receive sound advice and guidance from an experienced franchise consultant from the outset, to firstly establish if franchising your business is the right decision for you, and if so, how best to structure and develop your franchise proposition, in order to avoid any costly mistakes further down the line.

How can a franchise consultant help me? There are many aspects of the franchising journey that a franchise consultant can help you with depending on whether you are franchising for the first time, or if you are expanding an established franchise network. Whichever applies to you, it is so important that you choose your franchise consultant carefully, selecting someone who you feel you can build a good relationship with and who has a thorough understanding of your business, culture and strategic objectives.

There are a number of franchise consultants to choose from, each of whom vary in terms of skills, experience and fees. Therefore to assist you in the selection process, here are a number of key factors to help you choose the right franchise consultant for your business:. Appointing the right franchise consultant for your business is an extremely important decision and is one that you should take time to research fully before entering into a formal relationship with your chosen franchise consultant.

One would highlight from personal experience however that your journey into franchising will undoubtedly be more successful, your franchise business model will be more robust, and you will spend less on avoiding future business challenges, if you appoint an experienced franchise consultant to navigate you through the franchising process.

The role of a franchise consultant will vary greatly dependent upon the maturity of the franchise that they work with and the experience of the franchise owners. There should also be a financial analysis based on the financial figures achieved by the parent business to determine whether the potential income from franchising is attractive to both parties.

If the decision is to proceed, then the consultant will, in all likelihood, become involved in developing marketing materials both web and hard copy , advising on territory size and mapping, developing the documentation for the franchisee recruitment process, assisting in franchisee interviewing and assessment, franchisee business planning, engineering the operations manual, liaising with an appointed lawyer regarding the franchise agreement and devising the on-going training and support programmes for franchisees.

Alternatively the mature franchisor may need advice or support in a specific aspect of the business, such as lead generation or franchisee motivation. A good franchise consultant should, through their own experience, be able to assist at any stage of a franchised business from inception through to exit.

How the author supports franchisors. Bill has been active in franchising since working with both franchisors and franchisees. His business background covers a diverse range of sectors from retail to recruitment with his roles encompassing customer service, training, sales and marketing. As Franchise Director of a national recruitment company he has been instrumental in the launch of numerous successful franchisee start- ups. A combination of, creative thinking and hard work, is his recipe for growing a business.

Bill is an active member of the British Franchise Association, having held both regional and main board positions. He is also a former chairperson of the Franchise Group for Scotland. Using a good franchise consultant will bring an extra perspective to your business as well as a solid understanding of franchising. They will initially help you to identify if franchising is right for you and if so how will advise you on developing your system as a franchise.

Generally the services offered by franchise consultants are:. When finding a consultant look at a few, preferable those who are bfa members, and from asking about their existing and previous clients, including those they recommended didn't take the franchise route, you will get a good idea of who will be best for your business. To ask a franchise consultant a question click here. Your own accountant should be able to help you with your financial planning, including your business plans and guidance for franchisees on what they should be achieving from their business.

It is essential that you take legal advice, and should seriously consider using a lawyer that specialises in franchising. The bfa has a list of franchise lawyers that are affiliate members click here for the list. The lawyer will help you prepare a comprehensive agreement and you may need advice on registering your trade and service marks. By using a specialist lawyer it will increase your brand value and will give you and your franchisees greater protection.

We understand that you need to clearly see how your membership will aid your development. It will highlight areas to work on and the reasons why. After accreditation, there are of course a host of benefits. Here are 10 reasons why joining the bfa should be a matter of course for any franchisor with a passion for helping their franchisees succeed:. In joining the bfa you are demonstrating that you have made a commitment to franchise in an ethical and responsible way.

Membership also provides value through the franchisee cycle that can impact positively on the value of any resale. The bfa is an incredibly close-knit group of supportive, friendly and knowledgeable people. How to successfully scale up your franchise The British Franchise Association reveals the formula to success when expanding your franchise in the UK.

However, as is abundantly clear, this comes with many challenges. Franchisors who wish to see their business grow to upward of 50 units need to revise what strategies they will adopt to achieve this, as scaling up can sometimes lead to a dip in service quality if not done sustainably and with due care.

As the franchisee network grows, there is a responsibility to have a support structure in place. This, teamed with running your own operations, can sometimes take its toll. However, franchisees lift the weight of this as they will be perfectly trained and supported by the franchisor to own and operate the units effectively and successfully, giving the franchisor more time to focus on the overall business development.

This point is often where they need to employ members of staff. The bfa recognises the hard work this takes, and so we hold an annual Superbrand event, to bring together the biggest in franchising, from international developers to UK franchisors to franchisee entrepreneurs. Book your tickets here. Ask about franchising your business Franchising your business Franchise your business home Need help franchising your business?

Why franchise your business? Is my business franchiseable? Turning a franchise idea into a business opportunity Benefits of franchising your business Disadvantages of franchising your business How to franchise your business Developing your franchise business Cost of franchising a business Why use a franchise consultant Role of a franchise consultant What professional advice should I seek?

Joining the British Franchise Association How to scale up your franchise. Last UpdatedNovember The benefits of franchising your business Franchising, when done well can help you to make the most of the business idea that you have, to expand and to grow and to enjoy the experience with some really interesting people some of them can be challenging though! Considerations Of course, net margins may be lower because there has to be an income that will be attractive to your franchisee and so you will take a smaller slice but it will be from what we expect to be a larger cake.

Why banks like franchising The enthusiasm of the major banks to lend to franchisees demonstrates their faith in the franchise industry, where the failure rate is significantly less than in independent start-ups. Give it a go! Those who step forward boldly succeed! Click here to ask Nick a question for FREE If you want to find out more about franchising your business, click here to contact Ashtons Why franchise a business? Recession Proof No industry is recession proof.

Less Hassle In a franchise the day-to-day administrative burden is shouldered by franchisees. Launched in , the franchise connects loan originators and real estate agents to create a seamless, one-stop experience for homebuyers. This includes a three-day broker-training program at company headquarters in Denver that covers various mortgage products and services. It also gives franchisees access to a design center where they can produce marketing materials. Help-U-Sell Real Estate , established in , has a different playbook.

It was the first fee-for-service real estate franchise in the country, meaning that it charges a flat fee for its services to list, market and help close on the sale. Who knew cleaning could be lucrative. Image One is a commercial cleaning service started in It started franchising the following year and now has franchises across the country.

The company also offers help with obtaining insurance and discounts on additional supplies and equipment. This eponymous children's clothing consignment franchise was started in and has now expanded to 22 states.

Rhea Lana's provides franchisees training, its proprietary inventory management technology, bar-coding programs and website design.