As a business owner with multiple years of success and a value proposition that resonates with your target audience, growth and expansion are likely top of mind. You may already have multiple locations — also doing quite well — and you’d like to explore how to scale. Your concept might be an ideal candidate for franchising, where you can maintain the brand continuity and quality that’s helped you make a name for yourself, while recruiting additional owners to expand your market share. It can be a heady time, full of excitement and possibilities. But it doesn’t mean you should rush headlong into this decision without first doing a proper amount of research and due diligence.
To assist with your dream of replicating your successful business model, here are five things to know before you franchise your business.
1. Firm up your brand identity
Owning a successful business that’s now a candidate for franchising is already an accomplishment. But before you reach out to a franchise attorney who bills by the minute, make sure you firm up your brand identity. This should be an open-ended, rhetorical exercise in which the ownership, staff and customer base can participate. The goal in mind is to not only define your business concept but also communicate the value proposition responsible for your success to date. What problem do you solve for our customers? What makes your brand successful? How are you unique from the competition? Is your product or service currently in demand? Would this brand attract interest from ownership candidates? Why or why not?
Discover how you can firm up your brand identity, as this will become the nucleus of your franchise offering.
2. Compare and contrast
With more than 3,500 franchise concepts on the market today, there are plenty of examples for you to research and study. Look at franchise business models that operate in your industry or specific business sector. But don’t be afraid to also look at a few that operate in other categories. You can read about the highly-rated concepts that earned a spot on the 2022 Franchise 500 list, but it’ll also be wise to investigate the business models of brands of which you haven’t yet heard. After all, you’ll also be one of them when you first start. Focus on how these concepts communicate their value proposition to prospective owners. Ask yourself, “Would I be interested in owning this franchise?” Research about 50 or so. Then make a list of reasons why certain concepts are appealing, and why others aren’t. You can learn from both examples when it comes time to franchise your brand.
3. Create your brand’s owner persona
From the research you’ve conducted above, develop your brand’s owner persona — a three-dimensional look at your ideal franchise owner. Using the culture, values, mission and value proposition of your brand, create a profile that describes not just who is a match to own a franchised version of your business, but also why. What would their motivations be? What is the best way to reach them? Using your brand attributes, what personalities and leadership characteristics would be crucial for owning a successful franchise operation? The research you’re doing for these first three tips will pay off in the next two steps.
4. Draft your franchising assets
Using the information and conclusions from the research you’ve conducted so far, develop the first drafts of the franchising assets you’ll need to have on file before you can begin. This includes your business plan, franchising agreement, an operations manual and all 23 sections of your proposed Franchise Disclosure Document (FDD). You’ll want to model your assets from the best examples found in your research phase. These first drafts are just that — initial attempts at putting together the assets for franchising your business concept. These drafts are your opportunity to put your brand on a pedestal and communicate your vision for establishing a successful franchise system. These assets will be your starting point when it’s time to call in the professionals.
5. Call in the experts
You’ll notice this is the final tip included in this roundup of advice. That’s on purpose — you want to be as prepared as possible when you solicit expert advice from the professionals. It’s recommended that you bring in a franchise consultant who works on the brand side of the business, and a good franchise attorney. Get a good referral and find those who have an established track record of franchising a brand and concept. Set up separate appointments to allow each of these experts to offer their best advice in a one-on-one setting. You’ll learn quite a bit from both, so be prepared to take copious notes. Expect that you’ll be given direction on refining the franchise assets you’ve put together in draft form.
If it still makes sense to use franchising as the vehicle for your brand’s growth after careful planning and thoughtful consideration, it may be time to begin the capital and financing portion of the journey.
Original source: Entrepreneur