Franchise Your Business-Sparkleminds
Franchisees
will then pay the franchisor to use their brand and run their franchise unit
largely independently. Franchisors offer support, branding, marketing, and
operations guidance to franchisees, who then oversee the day-to-day running of
the business.
Franchising
can be an incredibly profitable form of growth, as it doesn’t require the same
level of capital as company-owned expansion, and so can be a much quicker
process
How To Franchise Your Business:
When
evaluating the cost to franchise your business, it’s important to understand
that, generally, there are two stages to the franchise development process:
Stage 1 – The Franchise Development Stage is the franchise development stage where you take the legal and business steps necessary to call yourself a franchisor and start selling franchises. During the franchise development stage, major milestones include developing and issuing your FDD, preparing your operations manual, and competitively benchmarking your franchise offering relative to your competitors.
What
you’ll learn is that the franchise development process is an ever-evolving
process that takes place over years as you continuously grow and improve your
franchise system.
Cost to Franchise Your Business:
When
we talk about the cost to franchise your business, right now we’re talking
about the franchise development process.
(Stage 1) and this includes: (a) competitively positioning your franchise offerings and the underlying rights and obligations between you and your franchisees, (b) preparing your FDD and the entire legal infrastructure needed to become a franchisor and start selling franchises legally and the right way, and (c) the development of your operations manual.
Steps to Franchise Your Business:
1. Determine if Franchising is Right for Your Business
Your
business, business systems and, personal goals need to align with franchising.
When you franchise, you’ll be responsible for recruiting, training, and
supporting franchisees as your brand grows.
Your
FDD should be prepared to comply with federal and state-specific franchise laws
and should be specific to your business and the franchise that you are
offering.
You
will be providing a confidential operation manual to your franchisees. Your
operations manual must document and inform you franchisees about all system
requirements and information needed to develop, open, and operate the
franchised business.
You
must register your trademarks with the United States Patent and Trademark
Office. More about trademarks here and what could happen if your trademarks are
not registered.
You
will need to establish a new franchise entity, typically a corporation or
limited liability company. Your new franchise company will be in the business
of selling franchises, supporting franchisees, and building systems to grow.
Before
you can sell franchises in franchise registration states franchise filing
states. You must file the appropriate applications and notices. Check out our
interactive franchise registration map to learn more about state-specific laws,
registration, and filing requirements.
Even
after your legal documents are complete, determining your initial franchise
sales strategy and setting a budget is critical. Evaluate your target
franchisees, target markets, interest in your franchise, and a realistic budget
for attracting, training, and supporting franchisees.
Why Franchise Your Business
Franchising,
as an alternative form of capital acquisition, offers some advantages. The
primary reason most entrepreneurs turn to the franchise is that it allows them
to expand without the risk of debt or the cost of equity.
First,
since the franchisee provides all the capital required to open and operate a
unit, it allows companies to grow using the resources of others. By using other
people’s money, the franchisor can grow largely unfettered by debt.
Moreover, since the franchisee -- not the franchisor -- signs the lease and commits to various contracts, franchising allows for expansion with virtually no contingent liability, thus greatly reducing the risk to the franchisor.
This
means that as a franchisor, not only do you need far less capital with which to
expand but your risk is largely limited to the capital you invest in developing
your franchise company -- an amount that is often less than the cost of opening
one additional company-owned location.
By
its very nature, franchising also reduces the risk for the franchisor. Unless
you choose to structure it differently (and few do), the franchisee has all the
responsibility for the investment in the franchise operation, paying for any
build-out, purchasing any inventory, hiring any employees, and taking
responsibility for any working capital needed to establish the business.
The
Franchisee is also the one who executes leases for equipment, autos, and the
physical location, and has the liability for what happens within the unit
itself, so you're largely out from under any liability for employee litigation,
consumer litigation, or accidents that occur in your franchise.
Moreover,
your attorney and other advisors will likely suggest you create a new legal
entity to act as the franchisor. This will further limit your exposure. And
since the cost of becoming a franchisor is often less than the cost of opening
one more location (or entering one more market), your startup risk is greatly
reduced.
Franchise
Consultants Mantra:
“ One -Step -Solution for Sparkleminds ”
Starting a business, becoming a consultant could be a good option for you, depending on your experience level.
India's Best Digital Marketing Owned Franchise Company and Two Decades of experience in this franchise and franchiser business extended in India
More Details:9844443200,9844443365
Visit Website: Sparkleminds