Franchise Development Process

Any successful business owner with a growing business should consider franchise development as an option for expanding a concept into new markets. This is true for small to medium-sized businesses as well as large businesses. The franchise development process is one that requires a methodical approach and careful strategic planning along with targeted and professional marketing processes.

Franchising can be an extremely effective and efficient method of business expansion given the right ingredients.

When developing a franchise program for a business entering the franchise industry, there are several essential steps that need to be taken in order to effectively model the franchise concept, protect the franchisor and have a solid, franchise model that can be easily duplicated.

Franchise Development and Expansion
Franchise Development Process for Growth

Here are the 4 essential steps of the franchise development process:

  1. Step 1: Create a Franchise Business Plan
  2. Step 2: Franchise Legal Documentation
  3. Step 3: Franchise Operations Manual
  4. Step 4: Franchise Marketing Program & Sales

Step 1: Create a Franchise Business Plan

The first step in franchising a business emphasizes the importance of approaching the market from a targeted and planned perspective. To accomplish this, a business owner must first draft a sound plan for the business expansion program.

When drafting this plan, it is important to include the legal documents and marketing approach for your business. It is important to have the following.

  • A good profile for the target buyer of the franchise system.
  • The well-defined franchise fee, royalty, and advertising fund model.
  • The financial model makes sense for both the franchisor and the franchisee.

Step 2: Franchise Legal Documentation

The second step in the franchise development process involves managing the franchise legal documentation and state registration process for franchise development. In order to offer franchises in the United States and within most state borders, a Uniform Franchise Disclosure Document needs to be documented based on the standards set forth by the Federal Trade Commission.

This document is complex and unique, it should be documented by a professional with specific experience in franchising. This is a very important phase in the process. When considering how to franchise your business, the legal process should not be taken lightly.

The State Registration process requires individual franchise application packages along with other required steps that States will want a new franchise system to go through prior to their being permitted to offer a franchise within the State borders.

Franchise legal documentation should be put together in a way that is conducive to doing business as a franchise company but also provides the franchisor with thorough protection and document compliance.

Step 3: Franchise Operations Manual

As part of the franchise development process, a franchise system should have a fully documented and defined operations system that allows the franchisee to learn the business model and understand the required standards as set forth by the franchisor. The Operations Manual should be effective as a sales tool for the franchise model, a legal liability limiter for the franchisor and a training tool for the franchisee.

Franchise Operations Manuals, training manuals, location manuals and other documentation should be done professionally and with extreme detail. This can make the process go as smoothly as possible and can also protect you from any risks that you might take on in the franchise development process.

A good franchise development model should have amazingly thorough and complete documentation and franchise training in place to duplicate and repeat the elements of what has made the original corporate location successful.

Step 4: Franchise Marketing Program & Sales

The final stages of the franchise development program should incorporate the marketing element of the franchise process. The franchise marketing plan should incorporate the channels with which the franchise will be marketed and sold, the media outlets and lead generation sources that will be used and the unique value proposition for the franchise concept.

Franchise collateral material such as brochures, pamphlets, and fliers should correctly sell the business as an opportunity for potential franchisees.

Franchise Marketing in most cases has little to do with what you sell to the consumer and much more to do with how you help people be successful as a franchisee of your business. The training, franchise support, brand and business model should be the franchise hot buttons for selling or marketing your franchise concept to potential buyers.

Good franchise programs take work, focus and a commitment to structure. It is strongly recommended that a company considering this transition into franchising consult with professionals in the field of franchise development.

Looking to Franchise your Business? Contact FMS Franchise today at 800-610-0292.

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