Starting Your Own Franchise
Posted on October 22, 2010 by My Franchise Law
So you’d like to start a franchise but don’t know where to begin? Here are a few quick tips to help you on your way:
The first step you should take is to do some research through the International Franchise Association, whose members include franchisors, franchisees and suppliers in many different industries. Their website includes resources to help you get started such as information packages, industry articles, and a forum where you can ask questions and get advice from other members. Once you’ve familiarized yourself with some of the franchising basics, there are a few key areas to focus on.
Documentation: Before you can reproduce the success of your business through franchising, you must first create a complete map of operations for your franchisees to follow. This includes a training program to teach your franchisee the ins and outs of running the business and a marketing plan to help them bring in new customers. Your franchisee is going to be a representative of your franchise organization. You’re going to want to ensure that you are as detailed as possible in your franchise business plan and training so that they can get off to a running start.
Finances: You must provide potential franchisees with audited financial statements from your business. Your franchisees need to get a clear picture of where your business stands before they make the decision to join the franchise organization. You will need the help of a skilled accountant to prepare these documents, and also to advise you on how to best set up your business for franchising success.
Legal: As the franchisor, you are legally required to give your potential franchisees a Franchise Disclosure Document at least 14 days before they sign a franchise agreement. This document includes detailed information about your business, such as any other companies that may be associated with it, if there is a history of lawsuits or bankruptcies, and any restrictions on territory or suppliers. You will want to consult with a franchise lawyer in order to ensure that all franchise contracts are prepared correctly and provide all the information necessary to meet the legal guidelines associated with franchising your business.
Attitude: One of the key elements that can keep you on track as a franchisor is maintaining a positive, engaged attitude so that you can continue to grow your business and help your franchisee become a success as well. You will need to be able to keep the lines of communication open between yourself and your franchisee, and exercise tact and diplomacy when telling them how you would like your franchise business to be run.