When getting ready to franchise your business, you should understand the necessary steps and items needed to improve your efficient and effective franchise launch. We’ve created this franchise checklist to understand when you are ready to franchise your business and how best to approach the process of franchising your business.
Franchising can be an effective expansion model for a wide variety of industry segments and businesses making franchise development more and more appealing for so many different businesses.
Getting Ready To Franchise Checklist:
Have a proven, consistent and validated business model on which the franchise can be based. The corporate location doesn’t need to be “beautiful”, but should be functional and able to be shown to prospective buyers.
Have financials that are organized and well documented in a way that can be presented to a prospective buyer in the FDD Item 19. Similar to when you go to sell a business, you should have financials that are presentable to a prospective buyer.
Systems are critical to making a franchise business model work. You should have technology in place, operating procedures and day-to-day methodologies for how to deliver your product or service to customers. Every business should have a backbone built on technology, if you don’t have some kind of system in place, you probably haven’t looked hard enough. The good news is that for virtually every business, there are a variety of options and most are very cost-effective.
Have your legal entity set up, insurance in place and your administrative “ducks in a row”. You shouldn’t be a Sole Proprietor any longer if you are getting ready to franchise your business, file an LLC or a Corporation and get positioned to build your business while protecting your assets.
Define your marketing and business development systems. When you franchise your business, people will count on you to help them drive sales and activity into their new business. Not necessarily that you as the franchisor need to make calls for them and close sales, but you need to have a franchise marketing system in place that has been proven and can be duplicated in new franchise locations.
Have a great brand in place, your logo, website, brochures, business cards and overall look and feel need to be immaculate. Franchise buyers will criticize everything and generally will invest in the best-looking and feeling brands. Spend the time and money to make your brand look appealing and you will be more successful in your franchise development.
Understand your consumer AND franchise market so that you know who you are competing with in both markets. The franchisee needs to have a market for your product or service when they open, so verify that there is an opportunity for your product or service outside of your immediate market. On the franchise market side of the business, you should verify that your offering is attractive and compelling when compared with other competing franchise systems. Your unique selling proposition should be interesting and exciting enough to draw people to your offering and convince them to invest in your franchise.
Have an “end goal” in mind, where are you headed with the business and what is your growth target? When you get ready to franchise your business, you should understand how you will support the growth, where you would like to take your brand from a market perspective and how you could accomplish this expansion while creating opportunities for franchise investors.
To be capitalized, you will need some funding to launch your franchise model, in part to develop the franchise business, but also to market and execute the franchise program.
For more information on how to get ready to franchise your business and what you should have in place before you franchise your model.