Taking My Franchise Public - Franchise Expansion Consultants
Growing a franchise organization is a technical
, multifaceted task that few have done effectively and most experience only modest growth overshadowed by strangulating debt. Real growth is rooted in strategic planning and corporate structuring. The proper configuration will have a board of directors, advisory board, well pedigreed C level executives, strategic alliances to induce growth, publicity strategy and other concepts that are mandatory prerequisites for a scalable business model that will last the test of time.Capital 'crunch' is always an issue with franchisors. Growth doesn't come easy in the absence of capital. Bank loans and lines of credit are not as available as they once were and investors need the exit strategy to be more immediate than quarterly dividends and a 5 year plan. Accredited investors and private equity firms want to see the light at the end of the tunnel before they even sign on the dotted line. The best exit strategy is to take the company public on the OTCBB (if you qualify for the NASDAQ even better but not likely).
When investors purchase equity in your franchise company pre public you'll most likely want to use a Private Placement memorandum also referred to as Regulation D and the most commonly used rule exemption is Reg. D Rule 506.
This will allow you to sell equity in your company for capital and the investors can place their name on the S1 filing with the SEC so that they can trade without restriction when the company is issued their trading symbol from FINRA and building a market. It's better to allow investors to create the market than for the company to liquidate shares onto the market. Use your publicist to get on TV shows and radio to talk as an industry expert and have an investor relations team creating and building trading volume with a powerful stock awareness program.
During the pre public and post public process you'll want to be heavily engaged in expansion and strategic partnership facilitation for cross promotional and expansion alliances. Next put together a killer sales program to bring in franchisees. Target geographic proximities where your franchise could thrive in the particular demographics offered by the region. Your publicity and ads should be heavily targeted in these areas. In a perfect world you would take care of all sales in house but it may be worth your while to investigate solid outside sales organizations that are compensated on a commission bases. Don't be afraid to stretch.
Seek out the most talented business brokers with seasoned track records and real ability. Sales efforts should center around major global markets if your product/service caters to those particular markets. Most franchise organizations that have the proper funding and structure find that a presence in the USA, Western Europe and China are the first regions that they focus on. The founders of the company should be stepping back by this time and getting out of the day to day ins and outs of running the company and more into the expansion aspect of identifying partners, franchisees, master franchisees and acquisitions.
Taking your franchise public can be an extremely rewarding venture that brings in the capital required for optimal expansion. If you have a growing organization and the willingness to take the dive, going public may be just what you need. When teamed up with a consultant that you respect and listen to, the process can be surprisingly easy.
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