15 Tips on Creating a Solid Franchise by:Nathan Bridges
There are countless franchises that have failed due to fundamental mistakes in their franchising models
. Their failures are an advantage to you because you can now learn from all the mistakes they have made. The following are 15 tips on creating a solid franchise business.
1. Make sure your business is making money. Nobody will buy your franchise if it doesn't make money. By selling your idea, you are ensuring "repeatability", which leads to profitability. People should be able to copy your business because it is making money. If your business is not profitable, then you should fix that before even thinking about franchising.
2. Study your competitors. It is very important to know who is in the playing field with you. You should keep an eye on what their strengths and weaknesses are. This will allow you to stand apart from the crowd.
3. Make sure there is a market for your product/services. Conduct market research to see whether there is a demand for what you are selling. Prospective franchisees want to know that there will always be a steady market for the product/service. 4. Build a strong management team. Leadership is very important when it comes to building a successful franchise model. Your management team should consist of both qualified managers and consultants that have a strong knowledge of your industry. They should also have knowledge of unique business and legal aspects of franchising.
5. Secure your trademarks, service marks, and other intellectual property. Your success lies largely in your ability to distinguish yourself from competitorsto promise customers an experience they can't get anywhere else. That's why it is crucial to take the legal steps necessary to protect your trademarks, service marks, trade secrets, copyrights, business methods, process patents, and more.
6. Ensure that you have a solid buffer of money. It is very important to make sure that you're well capitalized. Franchising often requires more capital than people expect. Whether you're merely starting off, or in the final stages, making sure you are well funded is critical. It's unwise to think that you will start making tons of profit in your first year. Royalty income will be minimal, and much of the income from franchise fees will be reinvested in training, marketing, and paying down debt.
7. Ensure that you have all the necessary legal documentation that outlines your company's business strategies and operating policies. A well-drafted Franchise Agreement and Franchise Disclosure Document are mandatory when creating a franchise. Those who are just starting off can obtain ready-to-use manuals from FranchisingMagic.com for a fraction of what an attorney may charge. The Franchising Magic System is an entire comprehensive franchising solution. All their manuals, forms and agreements are lawyer edited, and FTC-compliant. Your FDD must be prepared in accordance with applicable state and federal disclosure laws, while your franchise agreement must strike a delicate balance between your rights and obligations and those of your franchisees.
8. Establish a detailed training program. Your training program along with the operations manual, is your opportunity to ensure that franchisees do things the way you want it done.
9. Put together top notch field support staff. Your ability to duplicate the level of success and quality you've achieved in your prototype business is in the hands of your field support staff. Select and train them well, ensuring they understand the mission behind your business, as well as all the intricacies. They should be diligent in understanding the needs and concerns of franchisees, as well as be responsive in addressing franchisee issues.
10. Create a comprehensive franchise operations manual. Producing an operations manual can be painstaking and time-consuming. However there is no substitute for an informative, well-written operations manual. For a step-by-step guide for creating a detailed operations manual check out
http://www.FranchisingMagic.com. They provide a detailed Operations Manual along with tips and guidelines. Your operations manual is your crucial tool for ensuring that franchisees operate your franchise according to your wishes, in a way that is profitable and protects your business' good reputation.
11. Establish excellent relationships with lenders, suppliers, and other vendors. A strong network of expertise and resources that you can count on is very important. In addition to suppliers and lenders, you'll want to work with a good leasing company that can provide capital for equipment and supplies. If you intend to lease equipment directly, be sure your lease agreement contains terms that are favorable for you. Finally, registering your franchisee system with the Small Business Administration will help ensure that your franchisees can secure capital to cover their initial expenses.
12. Grow detailed research and development capabilities. Once your franchises are up and running, it's up to you to continually provide new and refined products and processes to your franchisees. Maintaining the status quo is a sure way to stunt the growth of your business.
13. Establish an effective franchisee screening system. Many people dream of running their own business, but far fewer have what it takes to do it well. You'll want a solid process for qualifying your franchisees based on their finances, business acumen, and character.
14. Set up effective reporting and record-keeping systems.This helps you routinely evaluate the performance of your franchisees and ensures that royalties are reported accurately and paid promptly.
15. Establish a comprehensive marketing program.Franchisees will look to you for local, regional, and national marketing campaigns that increase sales. These campaigns should be based on the measurable successes of your own marketing programs. Your campaigns will be aimed at customers, of course, and also at new prospective franchisees, so you can keep your business growing.
Check out
http://www.franchisingmagic.com for more information regarding ready-to-use, lawyer edited, franchise agreements, manuals and forms to help you get started with your business franchising.
About the author
Nathan Bridges,
Franchise Evangelist & Consultant
http://www.franchisingmagic.com
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