Franchising seldom lets you reach the financial success of an independent business. It does offer a sense of security though. Here’s how to franchise your business.
By Craig Falck for Africa Report.
Photograph: © Jason Stitt | Dreamstime.com
A franchise is a business whose commercial rights have been sold to people who open branches identical to the main branch. These branches conform to franchise rules, regulations and guidelines. Petrol stations, fast-food restaurants, chain grocery stores and vending stores… many of them are franchises.
Many businesses can become franchises. All you need to do is fill out forms with the franchise regulation authority. That doesn’t mean that you’re going to be successful, though – you need to analyse your situation first. Is your business expanding beyond your control? Is there a market in other locations? Is there a market for franchisees in the first place?
Becoming a franchisor is relatively easy compared to becoming an independently-run business. All you need to do is register with the franchise authority, fill out a couple of pages of paperwork and you’re done. That’s the easy bit… Just because you’d buy your product doesn’t mean the rest of the city would, let alone the country… Think carefully about this.
Here’s what you’ll need to do if you want to be on the right track to becoming a successful franchisor:
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A flagship store with a proven track record. No one is going to spend their money buying into a business if the main branch isn’t working.
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Systems documentation. This is your business bible. It dictates how every single aspect of the business works, how the business must look, what uniforms look like. Every single thing about the business must be in here.
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A protected trademark that stops others from copying it. Why would someone buy into a brand when they can just copy it? If your trademark is protected, people will associate your franchises with your quality and standard set in the flagship store.
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Franchise legal documents. This includes the Franchise Disclosure Document that outlines the business of the franchise, the rights and regulations and how everything works. Included is the franchise agreement, in which the franchisor and franchisee agree to the franchising partnership.
Being a franchisor is a great way to expand your business without actually having to spend money. Not everybody can be a franchisor though, so you’ll need to think long and hard (and do a lot of calculations) to make sure that you have what it takes to head up a major chain of businesses. Good luck.
Source: http://www.entrepreneur.com/article/206498-1
