You have gone a long way since you started as an entrepreneur and can now identify as a successful business owner. Having read and understood what it means to franchise a brand, you want to make your business a franchise. What steps should you take to prepare for this exciting new opportunity and launch your franchise?
The first step is to know when the right time to franchise is, and that answer can differ from one business to another. However, there are certain steps any business owner can take to get started on this franchising journey. Here are some steps every business owner committed to franchising should follow:
Have a Proof of Concept
Before you start franchising, build a money-making concept. For brick-and-mortar storefronts, that means having a few profitable units in operation. Meanwhile, the units should operate under the model you intend to license prospective franchises. On the other hand, if you run a service-based business, opening a franchise within a restricted area is ideal.
However, whether you own a brick-and-mortar storefront or a service-based business, consider the royalties and fees your franchisees will pay. Get books and financial records, where you segregate these operations to enable the easy tracking of your income, expenses, and other metrics. Moreover, you will need these documents to draft the financial performance representations your prospects want to review.
Know the Cost of Launching a Franchise System
Franchising a business costs time and money, requiring you to consult competent franchise counsel to calculate. Also, retaining an experienced accountant who can prepare annual audited financial statements is essential to the endeavor’s success. In addition, you should hire trainers, franchise sales agents, and other personnel to assist with drafting operation manuals, among other things.
Meanwhile, you can be intimidated by the costs and settle for low-budget franchise promoter outfits. If you must use low-budget promoters, ensure you do your due diligence and remember you get what you pay for. Many franchisers have filed lawsuits resulting from shoddy deliverables, exposing them to lawsuits from disgruntled franchisees.
Obtain Licensed Trademark Registration
You must obtain a federally licensed trademark registration if franchising in the United States. You can get that from the United States Patent and Trademark Office within 12 months. However, prepare yourself; it can take longer, or you may not even get it.
The essence of getting this license is to reassure prospective franchisees that they have the right to operate under the licensed marks. File with the USPTO as soon as possible, and after filing, ensure you keep all required maintenance filings up to date.
Draft your Operations Manual
You need an Operations Manual comprising a guidebook of system standards, operation methods, processes and procedures, and instructions. The key topics in the manual include a business overview, required equipment, customer service, materials, initial training, marketing, and advertising. You can start formalizing the operating procedures, best practices, recipes, and guidance to get yourself ready to prepare the manual when it is time.
Conclusion
“As you prepare to take your business to the next level, you need to understand that franchising is a whole new territory that must be navigated carefully,” says Attorney Jason W. Power of Franchise.Law. Therefore, adequate preparation is essential to actualize your desires for your brand. These four first steps towards franchising can prepare you and ensure you start your franchise journey on the right foot.
Media Information:
Franchise.Law
Charlotte, North Carolina
(980) 202-5679
https://franchise.law/
