Is your company at the “tipping” point? Are you thinking of ways to expand? Franchising could be your next move. One very common approach to growing faster is to franchise by adding new locations. The new owner(s) of these locations are invested, engaged and have the responsibility for staffing, sales, financials, marketing and more.
Franchising is big, and connecting with like-minded business people is an excellent way to grow, while providing independence for those owners who follow your systems. You can expand your company faster, sell your model for a fee and open new locations across wide geographies. Your franchisees buy into your brand and focus on their individual franchises. This is a win-win opportunity for both parties.
What questions should you be asking?
- Have you done your due diligence to understand franchising?
- Will your business be a bricks and mortar location?
- Would your brand allow for home-based start-ups?
- What price will you sell your franchises for?
- Will your royalty fees be set at 4, 6, 8 %?
- How will you manage your marketing fund?
- How many locations – in year 1, year 5?
When you create new franchise locations you gain market share. Your franchisees are financially and personally invested and committed to working towards overall success and sustainable growth. Benefit.
Here are the main documents you need to get started:
The basic document you use to qualify prospective franchisees. Each buyer needs to fill this out at the start to show they are serious. It is the best way to determine if they meet the necessary financial and business needs and fit the culture of your brand.
A legally binding contract between a Franchisor (seller) and Franchisee (buyer). Provides the owner with the legal right to set up a location, use the Franchisor’s product, name, programs and work with the system.
A practical manual for franchisees providing them with almost everything they need to run their business. It is a reference manual during training and once they launch their location. Topics include: logistics, office/store procedures, marketing tactics, financial metrics, systems, staffing, and the operational issues.
Franchise Disclosure Document:
This document should be signed by potential franchisees before you provide full disclosure regarding your franchise system. This protects both parties regarding disclosed information to be used only during discussions of becoming a franchisee. Although often US-based, many Canadian firms are using it.
The Wealthy Franchise can provide these documents, customized to your brand for less than $9,000 and this can get you started quickly and efficiently. We have the experience to do this for you.
You grant a licence that gives the franchisee the right to use your trademark, brand and operating systems after paying your basic franchise fee. A licence usually has a contractual, fixed-term.
Considering franchising, here are some necessities:
- Your business must be clone-able
- You must be able to support all franchisee owners
- Your franchisees must be committed to selling your goods or services
- You need an existing system in place that can be transferable
- You must be a great leader and mentor/coach your franchisees
Royalties provide support for franchisees.
Fees are collected monthly/quarterly, based on gross sales and used for:
- Research and Development,
- Sales and Marketing strategies, tactics
- Technical resources – computers, accounting programs, networking
- Training and support all year
The Wealthy Franchise has the experience in working with large franchise operations as well as with start-ups. We provide support at all levels: documentations, manuals, brochures, websites, sales, marketing, advertising, support and much more.
Franchising is not for everyone. If you have a single business location and are happy with the results, fantastic! If however, you are the crossroads of how to take the next steps and franchising may be the a consideration… please call us.
For a lot less than you may have thought, you can make the move into franchising. Let us help.
We help franchises every day: legal firms, accounting practices, in-home tutoring services, supplemental education schools, print and media shops, cleaning companies, nutrition stores, fitness outlets, coffee shops, restaurants, clothing stores, and more.