If you have started a business that has become wildly successful, you may be tempted to create franchise opportunities. However, as a franchisor, you are responsible for building a group of tools that will guide your franchisees. Most franchises offer marketing, supply, accounting and other assets to help their owners. Therefore, these are a few tips to get you started on your franchise ownership strategy.
Consider All Alternatives
Many business owners build franchises because they are looking for effective ways to scale their companies. However, franchises don’t work for every business. Therefore, you should consider every alternative you can imagine before beginning the franchise process. You may find that another growth model is more effective.
Make Sure Everything Is Legal
The Federal Trade Commission regulates all franchise operations through the Franchise Rule. Therefore, you need to understand what this rule entails and how to meet its requirements. Legal counsel can help you set up your franchise, including your disclosure document, making sure that everything is legal.
Clearly Outline the Costs
Your franchisees need to understand the costs associated with purchasing and operating one of your franchises. You also need to address the costs that you will face to advertise this opportunity. Therefore, build cost schedules for your costs as well as those of your franchisees. Consider comparing them to the percentage of gross income received.
Set Up an Accounting System
To create a successful franchise system, you need consistent financial reporting from all your franchisees. This consistency will help you identify what each owner is doing and how it affects their bottom line.
A built-in accounting system will also allow your owners to focus on managing the business rather than searching for or testing bookkeeping methods. Instead, they will receive software with clear instructions and/or training that can help them streamline this part of their business.
Provide Access to Valuable Resources
Your franchisees need to have easy access to valuable company resources. Therefore, you should consider creating a digital resource center. This center may include company updates and newsletters, but it should also provide brand guidelines, vendor contact information and marketing strategies. You may include other information, such as customer retention tips, legal information or any other content that your owners may find valuable and useful.
When you establish a digital resource center, you provide your franchisees with all the information they need to become successful and maintain your brand image.
Franchise ownership requires a lot of work and is bound by very specific laws. Therefore, consider working with an experienced attorney and other franchise companies if you choose this growth strategy.
