If you are thinking to franchise your small business but have no clue how to get started, then here are some quick-tips for you to get started with franchising.
Lack of capital, struggle to find a trustworthy business partner and difficult access to the perfect location are some of the challenges of running a small business that coerces small entrepreneurs to opt for franchising as their business expansion model. Since franchisees provide the initial investment at the unit level, franchising allows for expansion with minimal capital investment on the part of the franchisor.
So, if you are thinking to franchise your small business but have no clue how to get started, then here are some quick tips for you to get started with franchising.
Analysing Your Business
Analyzing your business refers to getting clear in your head while the business is ready for franchising or not. It is natural to think of expanding your business once you feel everything is stable, but that’s not it to convert it into a franchise. Even though you lack some capital, if your business has traits like steady sales, high demand and replicability, then it is a green signal. Analyse these three key points of your business before actually plunging into the fireball.
Organising Your Business before Franchising
Via franchising, you hand-over your own business to someone who is new to your system. It might happen that a prospective franchisee might not know a single thing about your style of doing business but possesses the relevant skills to run a business like yours. So, it becomes important for you to know about your own system of business yourself so that you can train anyone else. For this, there should be a process of precisely how your business works. Franchises will need exact details and guidelines to get their businesses up and running. Make your working process as detailed as possible, from marketing to signage to business cards and staff training, everything should be streamlined so that you can prepare a blueprint for your franchisees to follow.
Developing Legal Documentations
Franchising is somewhat like a legal knot that has to be nurtured with both the parties existing peacefully abiding by legal rules. So, to maintain a peaceful relationship, legal documentation is extremely important. A Franchise Disclosure Document is a legal document that determines the roles and powers of both franchisees and franchisors. In order to make it, you will need to set pricing, create franchise agreement and determine intellectual property protection and many more. Getting expert advice from an attorney is most preferred when you are a beginner in the field of franchising.
Being Selective While Choosing a Franchisee
Choosing a franchise is just like choosing your life-partner. You have to research your prospective franchisee’s background (both financial and professional), their skills and knowledge and many other things. They will be someone who will be representing your self-made empire (so what if it is at a small scale!). Choosing a franchisee must be a long process of analyzing, background research and interviewing.
Selecting Right Locations
Studies reveal that 80% of the businesses that come up fail within 18 months of their journey because of the impracticable location. Apparently, location plays a big role in business expansion. A location that suits your business the best, from where your target customer can easily access your services, and where competition is lesser, all of this together makes a perfect location for starting your franchise business.