How to Become a Franchiser

One way a franchise can be started is by expanding an existing small business using the franchise method. By doing so, the small-business owner becomes a franchiser. This allows the company to grow by generating additional revenue from franchisees. Franchisees are people that pay to enter the franchise system and operate a franchise. Franchising should not be pursued as a remedy for a financially troubled business. Another way franchises are started is by developing a business with the initial premise of franchising that concept. This type of franchise development must be carefully executed in order to ensure success.

Difficulty: Moderate

Instructions

Things You'll Need:

• Business concept Franchise plan

1. Develop a basic business concept. Create easily taught standards. Design simple easily duplicated facilities. Complex concepts deter obtaining franchisees. Create a small product list. Do not imitate other franchises.

2. Operate pilot program. Establish the brand name during this phase and test the marketability of the franchise. Operate several pilot franchises for a year.

3. Develop the operational manual. Write complete instructions covering day to day operations of the franchise. Include information covering the operational system, equipment, operating instructions and standard forms.

4. Develop the franchise package. Determine best location for franchises. Consider type of street, environment and foot and road traffic volumes. Hiring a franchise consultant who has experience marketing franchises is an option.

5. Market the franchise package. Showcase pilot program success. Provide newsworthy information to local and national newspapers. Attract media attention with pilot program grand openings. Advertise in Franchise World, a franchise magazine. Its website is http://www.franchiseworld.co.uk/.

6. Select franchisees. Be patient. Turn down applicants not matching all of the requirements. Require an initial investment from the franchisee. Franchisees that have no financial ties to the organization are more likely to walk away from the franchise if problems occur.

Tips & Warnings

• Hire an ethical franchise consultant with a good reputation.
• Do not sell franchises with out undergoing a pilot operation.

References

• The Guide to Franchising; Martin Mendelsohn; 2004