How to Franchise a Business in the United States

A small business owner can reap very large financial rewards by franchising a business in the United States. Motivations to franchise include a higher return on investment, a reduced risk and higher capital retention, but the benefits don't come without risks. Before you decide to franchise your business in the United States, you must carefully explore the pros and cons.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• Marketing and franchise plans
• Accountant
• Business consultant
• Franchise Lawyer
• Operations manual and training program

1. Decide whether your business can be franchised by determining its credibility, the demand for your products and services, your competition and your target market. In order to be successful, you need to have something that'll set your business apart from the rest.
2. Make your business easy to learn and operate. Franchisees depend on straightforward training programs that can be learned and implemented quickly.
3. Schedule an appointment with your accountant and spend time developing realistic franchise and marketing plans for the next five years. These plans will not only help you build your business effectively, but they'll serve as a foundation for your franchise disclosure documents and contracts.
4. Create the operations manual that each franchisee will use to run the business. Also work on the training program that you'll offer each franchisee. The manual should be very well organized and comprehensive, so that it answers most of your franchisees' questions.
5. Register your intellectual property rights as soon as possible with the United States Patent and Trademark Office. For information on protecting your rights, visit their Web site (see Resources below) to find information on applying and paying for your patent, trademark or copyright.
6. Work with a franchise consultant or marketing professional to create a franchise marketing plan. Common marketing ideas include creating a Web site, initiating a sale campaign and listing your business with a franchise brokerage firm.

Tips & Warnings

• If you own a successful corporation that is profitable and well managed, franchising may not make sense. However, the right business can experience rapid growth, see nationwide brand recognition and enjoy a highly stable investment.
• Expect to spend 3 to 6 months researching, planning and strategizing before your business is ready to franchise.
• Your first step in exploring the world of franchising should be to hire a franchise attorney, an accountant and possibly a professional consultant who fully understands the benefits and risks of franchising. Without professional advice, you risk losing everything and could even face litigation.