How to Make Your Business a Franchise
You've worked hard to develop your business into a successful enterprise and you're ready to expand. Franchising is a great avenue to expand your business without having to grow your own business any larger than it is. Franchisees pay franchisers for their expertise in a particular business and for the rights to market themselves as that business. Setting up your own franchise takes some time and effort, but if you're successful maybe you'll be the next McDonald's.
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Instructions
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Determine your fees. Franchisers typically earn two fees; the initial franchise fee and royalty fees. The initial franchise fee is a lump sum paid to the franchiser to start the franchise. Royalties are ongoing fees paid to the franchiser that are typically a percentage of gross revenue.
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Set your advertising requirements. Every franchisee will need to advertise his own business. Franchisers will typically spell out specific advertising budgets for their new franchisees to follow.
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Meet with an attorney to draft a franchise circular and franchise agreement. A franchise circular is the document required by the FTC that details the initial offering of a franchise. The circular and franchise agreement are typically presented together as the entire franchise contract.
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Advertise your franchise. Your local classifieds are a great resource for advertising your new business opportunity.
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Interview potential franchisees. You will be working closely with your new franchisees; be sure to conduct thorough interviews so you hire the right people to work with you.
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