5 Key Factors of Successful Franchise Development

When any business owner with a growing business thinks about expanding into new markets, one of the avenues to consider is franchising. So, what is franchise development? The process of franchise development is a proven avenue for turning a successful business into a successful chain both regionally and globally.

There are many factors that go into the franchise development strategy. Imagine if you will, a complicated recipe at the heart of a strong recurring business. This recipe, when done correctly and with proven ingredients, will feature all the components necessary to make it repeatable and reproducible by others.

FMS's expert franchise consultants have identified these 5 key factors of successful franchise development:

  1. Drafting a Franchise Business Development Plan
  2. Completing the Franchise Legal Process
  3. Create Operations Manual & Training System
  4. Marketing In The Franchise Development Process
  5. Work With a Reputable Franchise Development Company

1. Drafting a Franchise Business Development Plan

Laying out your franchise business development plan and growth strategy is a very important process. This will help you and your investors to be able to visualize the direction that you want to take with the franchise. This is also something that you will be able to use when you are in negotiations with them so that you will already have all the statistics and information that they need.

A good overview of franchise strategy development should include the products and services that will be provided. The description of the buyer should include the details such as their income bracket, location and demographic details etc.

A detailed financial analysis will enable a business owner to get an idea about the feasibility of his business expansion program, and a franchisor should also prepare a detailed analysis to target potential franchisees in specific regions.

2. Completing the Franchise Legal Process

The second factor of the franchise process involves completing the legal processes necessary before filing for state registration with designated states. Franchising an existing business or starting a new business through franchising can take as little as a few months or as long as several years to complete for newly developed businesses. In either case, legalities must be followed. 

These legalities fall into place in multiple states, and it takes careful planning to address each requirement with care. Therefore, without any exception, you need to find yourself a professional who understands how to create your Franchise Disclosure Document (FDD) based on the standards set forth by the Federal Trade Commission.

This is not something that should be done solely by someone with experience in franchising, but also an attorney who is familiar with the UCC Code, FTC regulations and requirements, and writing FDDs and FAs.

The franchise legal process is essential in a successful franchise system. A strong foundation will lead to a strong franchise network with potentially solid revenue and profits for years to come. As with most things in life, it is all about being prepared for what is ahead, making sound decisions and staying organized.

3. Create Operations Manual & Training System

The Franchise Operations Manual and Training System​ provides a comprehensive way to create documentation and is necessary for training on a franchise level that is easily repeatable. While most franchisors develop their own operations manuals, many don't take the time or resources to make sure they are done properly.

Solid training is essential for franchisees to know about business operations. The franchisor is legally bound to create a well-documented guide to ensure comprehensive franchisee training before the new franchise commences business. The franchisor also has to provide ongoing support and refresher training to ensure the chain has standardized products and services offered.  

Documentation, training, and operations manuals are necessary for the successful growth of any business that is franchising. If steps are not well documented, you can often run into problems that may hinder the development and operation of your franchise system.

4. Marketing In The Franchise Development Process

Marketing is an intangible element of franchising and is primarily based on your ability to sell the concept of franchising to franchise prospects, once the franchise process is complete.

The use of collateral materials including franchise websites, brochures, franchise presentations and flyers should be carefully crafted to pique the interest of potential franchise buyers and make them aware of all the advantages associated with owning a franchise business that offers products or services which are sold under the brand name of your company.

These materials will provide information on the number of units already in operation, locations where units can be found and contact information for those interested in owning one of these franchises.

5. Work With A Reputable Franchise Development Company

Working with a reputable franchise development company can make all the difference when learning how to franchise your business.  Franchise Marketing Systems has helped hundreds of companies start and develop their business models into franchises. 

The process can be intimidating, and FMS is here to help. We have put together a range of franchise services to offer our clients the best chance for success – whether you’re looking to build your own franchise or sell your franchise business. 

Call Franchise Marketing Systems today and find out what an experienced franchise consulting group can do for your business.

5 Key Factors of Successful Franchise Development
5 Key Factors of Successful Franchise Development

6 Best Reasons To Franchise Your Business

Are you a business owner looking for business growth opportunities? Have you thought about franchising but don't really know the Whats and Hows? Or rather, are you wondering why you should franchise your business in the first place?

If you answered “yes” to the questions above, you’re in the right place!

Franchising a business can seem like a daunting task, especially if you’re just dipping your toes in these waters. But what is franchising?

Franchising, simply put, is the act of selling the rights to another party for opening a new unit of your business (a shop, restaurant, spa, realty service provider, dog grooming service etc.). In turn, that party follows your already established business model and pays you a percentage of the gross sales as royalty.

First, Why Should You Franchise My Business?

If you want to expand your business to new areas, franchising will provide you with an opportunity to do just that using other people’s money and resources. There’s obviously a lot more to the benefits franchising your business brings. Let’s take a look at some of the major ones.

Now, let’s explore the 6 best reasons to franchise your business you should consider;

  1. Motivated Partners
  2. Increased Revenue
  3. Rapid Business Growth
  4. Boosted Business Value
  5. Better Market Coverage
  6. Higher Success-to-Risk Ratio

1. Motivated Partners

When you franchise, you get a partner that has invested a considerable amount of money into getting the rights to your brand as well as physically setting up the franchise. They are also ready to invest their time and effort into making the franchise a success. This gets them to work hard and take ownership of the profits and the losses and, in the process make sure you benefit as well.

2. Increased Revenue

As a franchisor, you will be tapping into an additional source of income. Each new franchise will add to your income by means of franchise fees, royalties, and markups on supplies. Additionally, you can negotiate vendor rebates when your franchisees purchase from the same vendors you do. Purchasing additional quantities from the same vendors also allows you to negotiate better prices, further increasing your net revenue.

3. Rapid Business Growth

This point extends from the one about increased revenue above. The revenue generated with every additional franchise - with little to no capital investment on your part - can be invested in your business’s progressive growth and development.

You can also grant rights to the franchisee(s) to own multiple franchises simultaneously.

4. Boosted Business Value

Each of your franchises is a symbol of your product or brand’s quality and authenticity. The more franchises there are, the more visibility they will get. This will generate new business in the form of new customers which will get new potential franchisees to reach out to you.

This will result in more franchises and the snowball effect will just keep on bringing on greater success and potentially more profits.

5. Better Market Coverage

Franchising provides the perfect opportunity for you to increase your market penetration. It makes this possible by allowing you to reach new locations and markets, effectively and rapidly. This in turn allows you to access larger demographics, effectively increasing the value your business generates. Additionally, there’s a chance that the franchisee themselves are quite well-established in their community even before they take up one of your franchises. This further lends credibility to the new franchise and thus your business.

6. Higher Success-to-Risk Ratio 

You shift a major portion of the risks associated with a new franchise over to the franchisee along with the capital cost that they are already bearing. Additionally, the franchisee also takes responsibility for the legal side of things for their franchise such as signing leases and employee contracts.

Research and experience have also shown that the chances of success associated with a new franchise of an existing brand are much higher than that of new, solo businesses.

Conclusion

As a franchisor, you have access to an additional revenue stream each time you engage in the establishment of a new franchise. Since your franchisees are investing their own capital and time, they will be working that much harder to ensure that the new outlet is a success. Increased revenue, greater business growth, and better market penetration then come as a natural progression of events.

Having the right franchise development team at your disposal can make this entire process much more streamlined for you. This is where FMS comes into the picture! We have an expert team of franchising and marketing specialists that will work with you and address your franchising needs from A to Z.

Get in touch to start your franchise today!

5 Essential Steps Before You Franchise Your Business

Business ownership is a long, sometimes treacherous, sometimes breathtaking, journey. From the first steps of figuring out how to make your ideas come to life, to the climb of streamlining operations, to the final hike towards the most rewarding view, the journey of business or franchise ownership keeps you on your toes. 

However, once you get to the top and your business reaches new heights, you will likely want to keep reaching and wanting more. 

Enter the franchise model. Once you feel like your business journey has reached its peak, you can start to explore even new territory and raise the bar by franchising. If your business is already successful, in demand, and can be replicated by anyone, anywhere, you may have the perfect opportunity for expansion.

Before you franchise, you should know the roadmap to grow your business. When you understand the below 5 essential steps before you franchise your business, you can prepare yourself for this new business venture;

  1. Decide If Your Business is Ready to Franchise
  2. Make Some Hard Decisions
  3. Secure All the Franchising Paperwork
  4. Recruit the Right People For Your Franchise
  5. Give Support to Your Franchisees

1. Decide If Your Business is Ready to Franchise

The first step may feel like the biggest. It requires you to be honest as you evaluate your business. You will need to consider a few factors to know if your business is ready to scale.

Scalability 

The framework of your business must be solid, and your model should be both easily understood and simple to replicate. If your business has built a strong, successful presence and the demand is there, people will be likely to jump on board.

Demand

Do some market research on your industry trends before you move to the franchise model. Even if people are knocking down your doors to get their hands on your products or use your services, you need to be sure that this is consistent with the demand in the industry. 

Financial Growth

Before you franchise, take a good look at your financial statements. Not only will you need to be transparent about these numbers you provide potential franchisees, but you will also need to be transparent with franchisees (within the legal boundaries) regarding financial expectations.

2. Make Some Hard Decisions

As a business owner, you are accustomed to making tough calls to drive your business forward. When franchising, it is no different. You need to sit down and answer some important questions to determine your franchise model.

By asking yourself the hard questions before you move forward, you can choose everything from your business model to your training program materials to your financial requirements for franchisees.

3. Secure All the Franchising Paperwork

Once all the decisions are made, they need to be written and disclosed to the Franchisee. This is done through the legal documents (the Franchise Disclosure Document and the Franchise Agreement) which are binding for both you and the franchisee.  In some States within the US, you will be required to submit the Franchise Disclosure Document for registration. 

Once this is done, take a deep breath, sit back, and wait for their approval.

4. Recruit the Right People For Your Franchise

Once your Franchise Disclosure Document has received the necessary approvals for franchising, you are ready to start recruiting. Consider ways to spread the word about your new, exciting franchise opportunity. Create marketing resources, go to trade shows, and talk to your most loyal and trustworthy customers and employees.

You just may be surprised at how people respond to the chance to join your team and start their own business journey under your guidance.

5. Give Support to Your Franchisees

Remember: when your franchisees are successful, YOU are successful. You have already chosen the right training program and educational resources to onboard your team, but now is the time to make sure they work. Giving ongoing support can ensure that your franchisees have access to the resources they need to be successful.

Are you ready to start those first steps to your business franchise journey? Contact our FMS Franchise Consultants to set up a meeting and learn more about how we can support you through this exciting opportunity! Contact us today at.

Benefits of Franchising Your Business

The benefits of franchising your business can be extensive, but when it comes down to it, the key benefit is a transition from operational focus to strategic.

As an entrepreneur continues to grow their business, managing all aspects of the day-to-day business effectively quickly becomes a challenge.  Multiple locations of any enterprise involve many moving parts, all of which need to be monitored and maintained in order to sufficiently and successfully exercise a typical day of business. 

Elements such as staffing, customer service, sales and brand continuity all become more and more difficult as   Growth can lead to unsustainability if not acted on properly.  Business owners frequently wish for expansion but fear their ability to control each operational process will become muddled or lost altogether. 

And, in most cases, they are probably right.  Many times, business owners who grow through company-owned and managed locations run into obstacles that hinder growth as the business expands beyond what they can manage directly.   

It is at this crossroad in a business’ growth that franchising becomes a viable expansion option.  Franchising your business allows you to multiply a brand’s footprint, but with added manpower and capital to scale the growth.  The value of having independent business owners who have money invested and their direct, onsite focus is enormous and the performance of franchise-owned and operated businesses almost always outperforms company-owned locations of the same business model.

Franchising your business can also reflect positively to the business’ image, as the public sees this new business as locally owned and operated and if the franchise owner is the right person they are connected to the community and know how to connect to consumers in the area. 

People are naturally attracted to familiarity, and a process that is consistent regardless of the location in which it is being executed will lead to successful results.  Franchising allows a brand to grow and duplicate at several levels.  At the national or global level, all franchisees and corporate units contribute to a marketing fund that is used to promote the brand and build awareness for the company. 

At the regional level, franchisees work together through regional cooperatives where advertising dollars are spent in a region to build local awareness and leverage economies of scale in advertising and promotion spending.  At the local level, franchisees are required to spend dollars on promoting and advertising the business in their immediate market.  The combination of the advertising platforms maximizes the opportunity for brand development and makes franchising a win-win relationship between franchisor and franchisee.  

Franchising your business allows entrepreneurs to attract other like-minded people with a thirst for owning their own business, but with the desire to have guidance and support along the way. 

Many do not want to endure the time, effort and risks inherent in starting a business from the ground up.  By purchasing and joining a franchise, franchisees are able to reduce stress and increase the chances of success.  Franchising your business will naturally pool resources together – collaboration amongst franchisees leads to sharing of ideas and proper quality checking of each system and process. 

A business owner benefits from having easy access to criticism in an appropriate and relevant manner.

The entrepreneur who is able to make this transition stops focusing on the small items inherent in managing a business and begins to focus on what strategic aspects will help drive the growth of the brand and scale the business.  The funny thing about this transition is that people who are stuck in an operational mindset many times are busier and work harder than those who are strategic-minded. 

Franchising is a big picture initiative where the product becomes the business model itself and with each transaction, the brand grows exponentially. 

For more information on the benefits of Franchising Your Business, Contact us:

[email protected]

Are You Ready to Franchise Your Business? 5 Questions to Ask

Franchise Your Business
Are You Ready to Franchise Your Business?

You have a business and want to expand.  There are a variety of ways to expand the number of locations, company-owned, bringing on partners, venture capital or franchising. Many businesses decide that franchising could be an extremely effective way to develop a brand and business model without the intensive capital or staffing needs of other channels. But how do you know your business is ready to franchise and how do you know when is the right time to franchise your business?

Here are some questions to ask if you’re seriously considering whether to franchise your business or not:

  1. Is your business currently successful and how do you define that success?
  2. Why is your business successful?
  3. Can you afford to franchise?
  4. Can you sell your franchise business concept to entrepreneurs?
  5. Are you ready to provide the systems to franchise owners for long-term success?

1. Is your business currently successful and how do you define that success?

If you want to entice entrepreneurs to invest in your brand, it must have a track record of solid revenue growth, dependable profit margins, and a strong customer/client base. Your business may be ready to franchise if the business has credibility based on current success.

2. Why is your business successful?

Can that success be achieved in other locations in volume? The success must be due to factors that can be replicated and easily taught to others.

For example, if your successful concept is based on a service that’s in high demand and isn’t widely available, your business may be ready to franchise if prospective owners can learn how to run your business model.

But if the reason your business is successful is due to being located in one hot market or having unique skills that make you best suited for success, you may not be able to replicate that success.

3. Can you afford to franchise?

You may be ready to franchise your business if you have the capital to put the necessary franchise infrastructure in place. You’ll need to hire attorneys to provide legal support and all the necessary documentation. You’ll need to set up training, operations, and marketing systems. You’ll need to cover the cost of state registration fees.

You may hire franchise consultants. The cost to the franchise can range from $15,000 to $100,00 depending on the business.

4. Can you sell your franchise business concept to entrepreneurs?

How will you convince anyone to spend the money necessary to open a location for your brand?

You’ll need to market your business to prospective owners and sell them your concept. You may be ready to franchise if you can make the argument that between the franchise systems you’ve put into place and the prospect of customer/client demand and revenue, your business will be a success for anyone willing to take a risk.

5. Are you ready to provide the systems to franchise owners for long-term success?

If you’re ready to franchise your business, your franchise plan must include systems for training, operations, administration, and marketing. If your business requires equipment, you need to find ways to minimize those hard costs for owners.

You may need to offer assistance with lease agreements or attain the most desired locations. Your business needs to be turnkey for every franchise owner. You may be ready to franchise your business if you have a solid plan for franchise owner support.

For more information on when you should franchise your business, contact us for a free franchise consultation.

How to Franchise Your Business Well

Why is it that some franchises seem to expand so quickly and others can’t seem to get off the ground?  In the franchise development world, you have the opportunity to see some “out of this world” ideas and business concepts.  The really exciting part of working in franchising is that we are able to work closely with entrepreneurs who have more vision, insight and ability to innovate than anyone on the planet.

We are confident that what drives the global economy is the small business owner and entrepreneur who is looking for ways to create, constantly looking for ways to build and always taking a positive spin on how to approach opportunities.  Franchising is a nice way to keep your finger on the pulse of the global small business economy and to see what, who and how people are doing business. 

In most cases, what happens in the small business and franchise markets is what is coming to the broader market.  On one hand, the franchise market has produced a multitude of amazing success stories, but why do some not scale as efficiently and achieve duplication of their brand through franchising?

When you franchise a business, you enter a new world of business, some business leaders just aren’t great at being a coach.
Just because an entrepreneur makes a fantastic product and excellent pizza, doesn’t necessarily mean they have the business skill set needed to teach, coach or mentor others. 

Franchising is a business where the franchisee invests in the business because they need advice, guidance and counselling from the franchisor.  A Franchisor needs to be able to share and teach intellectual property to new franchisees and sometimes the entrepreneur can hold back the growth of the company if they are unable to communicate effectively to teach, train and sell the vision of the franchise model. 

Our direction to a business that is just starting to Franchise the Business model, do a hard self-evaluation, if you don’t have the skill set to do this, there are lots of professionals out there you can bring into your system to support your growth and be a leader within your franchise business.

Franchise Development is a Serious marketing and sales business

There are cases in franchise development where “Build it and they will come” holds true, but the majority of the time, it takes a concentrated effort to market, promote and sell the franchise.  When you franchise your business, you now are tasked with the responsibility of sharing your vision and convincing other people that what you have to offer is worth the investment and offers value to them overdoing it on their own.

Franchise development is unique in that you are effectively selling “air” when you promote your franchise brand.  This transition from selling a physical good, product or item to now selling an idea requires a good marketing plan, franchise sales process and resources to support these marketing efforts.

Typically, this requires the involvement of franchise brokers or professional franchise salespeople who can assist the new franchise in going to market.  The franchise systems that have success in franchising invest the time, money, and effort into franchise collateral materials, promotional tools and overall branding.

The great franchise systems certainly have a look, feel and presentation that resonates with a potential investor and looks bigger than a “mom and pop”.

You Should have a Great Concept when you Franchise your Business

Good ideas are never easy to come by, but when you do find one, the process of franchising allows a business owner to leverage that idea and monetize the concept through growth and duplication into new markets. 

Some markets are just tough to the franchise when it comes down to it.  If you have a QSR foodservice model and are considering franchise expansion, you better have a strong differentiator to be able to attract attention and draw interest from other foodservice franchise brands.  In some cases, established and mature markets can be franchised with a good concept and a unique approach to the model.

OrangeTheory is a great example of this idea, it started with a new approach to fitness and health services using the group fitness model and what started out as the “Ellen Latham” fitness program used innovative technology and system to help clients measure their heart rate as they went through the fitness program.

With partners, the business rebranded to OrangeTheory and in only 6 years was able to expand to over 1,000 locations worldwide.  Fitness is a crowded and competitive market which makes this growth even more incredible, but what has helped drive the expansion is a great concept, something innovative and different from what had been done in the past.

The branding and overall look, feel and presentation are what have helped carry the model forward and in an essence have been the vehicle to support new franchisees' willingness to invest in the model.  Ultimately, if you are going to franchise your business, you should have something innovative and something that will create interest and ultimately spark the investment in your brand and franchise model.

Good Numbers are the Heart of a Good Franchise

It only makes sense that when you franchise your business, you are ultimately selling an investment opportunity.  If the numbers and return on investment exceed expectations for franchise investors, odds are that the model will continue to sell and grow. 

The Creamistry Franchise model is a good example of this which is a new brand in the ice cream and frozen dessert market segment that has in a way redefined the market niche.  The model incorporates liquid nitrogen to freeze the ice cream product and at the unit, the level has produced significant revenues and profitability for early adopter franchisees.

Impressive financials have been part of the presentation for Creamistry and the response has been nothing short of miraculous with over 200 units sold in the first three years of franchise development. 

Fortunately, franchisees have been able to generate similar numbers in their units and continue to validate the brand and financials which in turn only drives more unit growth.  What Creamistry has realized, much like other brands is that when the model works and financials exceed the norm for an industry, multi-unit and master franchise growth becomes a reality. 

Multi-unit franchisees are capable investors who have the capital to invest in 2 or more locations at one time.  In some cases, they will invest in large numbers of units at one time exceeding 50 units over a defined time period.

For more information on how to decide whether to franchise your business and when is the right time to franchise, contact us for a no-obligation consultation to review the model.

What is a Franchise?

What is a Franchise?

Whether you’re a new entrepreneur starting out or you’re already an investor looking for more opportunities, learning about a franchise is a great way to go. Maybe you’re wondering what a franchise is or how you get started in owning one. Learning what a franchise is can help you in determining whether you want to invest in a franchise or try to start something from the ground up. Here are a few tips on what a franchise actually is and why it is a great investment for your future.

A Franchise is a Proven Business Model

The franchise business is one that has a proven business model and a platform which can be leveraged by new franchisees. If a company is offering franchise options, it means the business model they have is successful and is making a profit for the company and hopefully, when given the same tools and resources, you as a franchisee can replicate their success in your own business. Those who do not have success in their business model typically do not franchise out. That would not be a wise choice for their company as franchising is merely the replication of a business model and operating system, remember the saying “Garbage In, Garbage Out?”. The franchise business model is one that is proven to work in a variety of markets and will be a profitable and successful business where it goes.

Marketing Systems and Business Development

A franchise also means there is a marketing and development system plan in place already that allows a new franchisee to ramp up their business and customer base in a shorter time period when compared with a new business start up. This model helps you to get the word out about your location in a way that is shown to draw in business. By working through the proven model, you can increase your customer base before you even open up your days. Marketing strategies that have been proven to work are already in place so you do not have to try to come up with your own. The brand image should be established, not necessarily with television or national exposure, but the brand should have logos, color schemes and overall branding already set and in place so that you have the tools and presentation needed to effectively begin your marketing and sales quickly upon starting the business.

Mentors and Network

When it comes to owning a business having a good franchise mentor in place is key to your success. Owning a franchise puts that mentor in place from the beginning and provides people who have been in your shoes and worked in the business model with enough time and experience to be able to provide value to you in what TO do and what NOT TO do. You can work with someone who understands the business, knows the ins and outs, and can assist you in all the bumps you may come across along the way. It also puts in place a readymade network of likeminded business people working together. Not only are you networked with great people, you’re working for yourself instead of for a boss. You can have your dream of owning your own business and being successful with a coach and mentor already in place.

Lower Risk

Starting your own business can bring about a variety of risks (a new business is generally in excess of 90% failure rate when compared to a franchise model which has an 80% or higher success rate). If you invest a lot of your own money into a model that is brand new, you may find yourself at a total loss if the business fails to take off. When you use that investment and buy a franchise, you will find yourself at a much lower risk of loss. The brand and the franchise itself is already proven to work so it’s a better investment for you. You’ll find your money is safer going into a franchise than if you were to try and develop a company, marketing plan, and business on your own.

 

So what is a franchise in the end? 

To sum it up, the best definition we’ve found is “entrepreneurship with a safety net,” we felt that this summed up the concept perfectly.  Franchising, when done right is a great combination of providing people with an investment opportunity to become a business owner without all of the risks, fears and anxiety around how to start the business effectively.  It is your business when you buy a franchise, but you have the guidance and support of an experienced partner in your franchisor. 

For more information on what is a franchise, contact us:

https://franchiseconduit.com/contact/

How Franchise Your Business Model Early On

When you sell your first franchise, the initial development efforts typically consist of franchisees who wouldn't necessarily make the cut later in your franchise system's life cycle.  Mature franchise systems are much more aggressive and diligent as to who is allowed into the franchise network.

This isn't necessarily a luxury that new franchisors can afford.  The largest single point of failure for a new franchisor is to not sell the initial five units that start to validate the business model and brand.  This puts a significant amount of pressure on new franchise systems to get these initial units sold and as a result, typically the failure rate is higher for early-stage franchisees.

  1. Who typically buys the first five franchises of a new franchisor? They usually are a bit more entrepreneurial than they probably ought to be. They are willing to take more of a risk and see the longer-term vision of the brand and the leadership of the franchise company. They want to negotiate the fees, territory and other material items in the franchise agreement. As a new franchisor, you need to be careful with who you sell these, while not screening too hard, you also should be able to spot the landmines who really exhibit poor character traits for a franchisee. You also should be conscientious of how large and how exclusive you make territories as these early agreements sometimes become a thorn in growing franchisors' sides as they gave away too much or were too generous with early franchisees.
  2. What kind of terms should be considered when negotiating a franchise agreement with early-stage buyers? We have seen anything and everything negotiated in a franchise agreement, I wouldn’t rule out any possible terms as negotiating points if the buyer is right and the long-term opportunity justifies the deal. Make sure that you get enough money up front and try not to touch royalty structures as the long-term revenue stream will have an exponential impact on your bottom line and in most cases don’t make as significant of an impact in the negotiations of the franchise sale. Look first to the initial franchise fee and territory size, most early-stage franchisees will respond to these offers.
  3. How do you find early-stage franchise buyers? Most of the time, early franchise investors come from the same channels from that the majority of franchise sales originate. We recommend the franchise lead portals (www.FranchiseConduit.com, www.BizBuySell.com, www.FranchiseDirect.com, etc), although they are not necessarily the best leads all the time, they are consistent and with the right sales process will produce sales for an early franchisor. Organic leads will many times play a large role in early franchise sales, pay attention to customers who ask about the franchise, leads that come in off your corporate site or referrals that come to you asking about franchises.
  4. Managing the franchise registration process while you sell your early franchises, you should be careful with managing the franchise regulatory process. First, you need to make sure that you have a good franchise attorney involved in your sales and transactions with each of your new sales and make sure that you have a solid franchise disclosure document. Cover yourself to make sure that the sales are managed appropriately and also that you are careful to manage the franchise registration process.

We recommend limiting any communication with potential franchisees in franchise registration states as soon as you find out what states they are located in. Know the franchise registration states and understand that your franchise must be registered in these states prior to any marketing or sales activities taking place with a potential franchise buyer.

For more information on how to franchise your business and how to sell your first franchises, contact us:

[email protected]