7 steps you must take to franchise your business
- 1. Make sure that your business is ‘franchiseable’ While ‘franchiseable’ may sound like a made-up word, this first step is vital if you want to be a successful franchisor. ...
- 2. Develop a business strategy ...
- 3. Refer to the BFA ...
- 4. Seek specialist advice ...
- 5. Decide on your fee structure ...
- 6. Recruit and train franchisees ...
- 7. Market the franchise ...
Full Answer
How to turn your small business into a franchise?
- Set Realistic Goals. Franchising is more of a marathon than a sprint. ...
- Research Your Competitors. ...
- Develop Your Franchise Offering for Both Individual and Multi-Unit Sales. ...
- Make Sure Your FDD Is Compliant for Every State. ...
- Learn Franchising and Get Involved in the Franchise Community. ...
How to succeed in franchising your business?
- The success of any business is linked to the level of enthusiasm you bring to the job.
- Enthusiasm brings a level of excitement and energy to the operation that everyone can feel-including your customers and staff.
- Let your staff in on the fun. Acknowledge their good work with recognition or a raise.
Should you start a franchise business?
There are many benefits to running a franchise, as there are benefits to starting a new business. The truth is, which one is right for you will depend on what your goals are and the type of entrepreneur you are. If you start a business from scratch, you’ll have your work cut out for you.
What are the advantages and disadvantages of owning a franchise?
These include:
- Limited Control: As a franchise business owner, you have limited control. ...
- Costs: Opening a franchise is not a cheap endeavor. ...
- Potential Leadership Changes: There is always the possibility that the franchise can be acquired and new leadership will move in.
- Lack of Privacy: Being a franchisee also comes with a lack of financial privacy. ...
How much does it cost to franchise a business UK?
The initial franchise fee is usually the most expensive fee you have to pay on your journey to becoming a franchise owner. This fee can usually range from anywhere between £300 all the way to £250,000 and up, depending on which franchise you decide to make an investment in.
How do I turn my business into a franchise?
How to Franchise a BusinessMake sure your business is ready to franchise.Protect your business's intellectual property.Prepare a financial disclosure document (FDD)Draft a franchise agreement.Compile an operational manual for franchisees.File or register your FDD.Set a strategy to achieve your sales goals.
How do I start a franchise business in the UK?
Luckily, we've got all the tips you need to make the right decision and take the first step towards starting your very own franchised business.Do your own research. ... Book your place at a Discovery Day. ... Location is key. ... Secure your funding. ... Read the franchise agreement … then read it again! ... Seek out professional help.More items...•
Is a franchise a good idea UK?
Franchisees take less financial and personal risks than a new business owner but enjoy a higher chance of turning over a healthy profit. A new franchisee partners with an experienced franchisor so they do not need to invest unnecessary time, energy or capital into getting their business up and running.
How do franchise owners get paid?
How do franchise owners get paid? Franchise owners can pay themselves a salary or depending on their business entity, they may be able to take a draw from their accumulated equity.
What are the 4 ways to become a franchisee?
4 ways to become a franchiseeFigure out your passion and skill set. Buying a franchise business shouldn't just be about facts and figures. ... Prepare to buy-in. ... Investigate franchise brands. ... Speak to experts and existing franchisees.
Do banks give loans for franchise?
Credit unions and commercial banks too offer franchise business financing. However, the process of documentation may test your patience. Your choice institution will study both your personal and business credit scores.
How much money do I need to buy franchise in UK?
The average set-up cost for a franchise in the UK is estimated to be around £40,000, according to the British Franchise Association. The costs associated with buying a franchise tend to include: The initial franchise fee, the right to use the company's brand, intellectual property, business plan and so on.
How does franchising work UK?
Franchising is when an established business allows a third party the right to operate using their trade-name, either through their manufacturing, distribution or sales channels. This is usually in return for a one time franchise fee, plus a percentage of sales revenue.
What are 3 disadvantages of franchising?
The franchise agreement usually includes restrictions on how you can run the business. You might not be able to make changes to suit your local market. You may find that after some time, ongoing franchisor monitoring becomes intrusive. The franchisor might go out of business.
What are the risks of franchising?
Three Types of Franchise RiskReputational Damage. Franchisees are investing in a business model, but they're also investing in a reputation. ... Joint Employer Liability. Labor violations have proven to be an especially complicated issue for franchises. ... FDD Compliance Issues. ... Limiting the Risks.
What franchise makes the most money UK?
Top 100 Franchises in the UK 2019RankFRANCHISE NAMEIndustry1McDonald'sFast Food Franchises2Domino'sPizza Franchises3StarbucksCoffee Franchises4Pizza HutPizza Franchises16 more rows
Why should I turn my business into a franchise?
Franchising allows bigger businesses to branch out and grow while giving people the opportunity to run their own business with the help and support of a larger company that has a proven formula for success.
When should you franchise a business?
As a general rule, it's recommended that businesses have at least one to three years of successful operations before franchising. That number could be higher or lower, however, depending on the industry. For some businesses, franchising during the first two years of operations can be advantageous.
What does it mean to franchise a business?
A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand's trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
Why should I franchise my business?
Advantages of buying a franchise You don't necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model. Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise.
How to franchise my business
If you already run your own successful business, you may well be considering the benefits of offering franchises. Perhaps you’re wondering how to franchise my business in the UK, and whether your operational model will work for others?
Benefits of setting up a franchised business operation UK based
Just about any UK business can be transformed into a franchise model, so long as it can be operated nationally and is already profitable. One major benefit of franchising your business operation is that you acquire a variety of owner-operators prepared to put the work into their business and achieve success.
So, how to franchise a business in the UK
As the business lead for your company, you know all the ins and outs of running the operation. If you want to set up your company as a franchise, you will need to get your operations manual down in writing. This will be the “Bible” that your franchisees will work to.
How to sell a franchise to a potential franchisee?
To do this, set up a pilot operation (or preferably two). The pilot operation may be a new business owned by you, or it could be a franchisee who you offer preferential terms to because this exercise will be a learning curve for both of you. The pilot operation should run for at least a year so the new business can experience all trading conditions. During this time, you should be analysing their results, refining your systems and ironing out any potential difficulties. Some of the most successful franchise businesses are the ones where the franchisors give their franchisees the best support and training. During the pilot operation you should also work out what initial and ongoing training you will need to provide to ensure your franchisees can achieve consistent results. When you’re confident you have a system that someone else can successfully follow, you’re almost ready to start selling franchises.
What is the key to a successful franchise?
However, the key to a successful franchise is consistency . You need all of your franchisees to be able to run their businesses using the same systems as you and achieve the same results. To help them do this, you must document all of your processes and procedures and collate them into an operations manual.
What is a franchise agreement?
The franchise agreement is a legally binding contract which serves two important purposes. First, it gives the franchisee the right to use your brand and business systems in their own business; and second, it enables you, the franchisor, to control the franchisee to ensure they follow your systems exactly as you want them to.
How to prepare for franchising?
As well as preparing your business for franchising, you need to prepare yourself. As a franchisor, your day to day role is going to change. Rather than focusing on running and growing your own business, you will have to be there to support your franchisees. If you don’t want to do this personally, make sure you have someone in your business who is ...
Is Nando's a franchise?
Although Nando’s is not a franchise in the UK, the Nando’s versus Fernando’s dispute is a classic example of what could happen to you as a franchisor. I wrote about this in a previous article, but very briefly Fernando’s opened a chicken restaurant with very similar branding to Nando’s.
Is there a regulation for franchises in the UK?
In the UK, there is very little formal regulation over franchise businesses. Instead there is a system of self-regulation through the European Code of Ethics for Franchising. This gives guidance on best practice in the franchise industry.
How do I franchise my small business?
How do I franchise my small business? A small business owner may ask a Franchise Consultant, how do I franchise my small business? Franchising is often seen as a logical next step for business growth. The dream of growing a business empire, via a franchise network as a small business owner can be tempting. And …
What is the relationship between a franchisor and franchisee?
What is the difference between a franchisor and franchisee? The franchise has helped to shape the modern business landscape. Without franchises, there wouldn’t be McDonalds, Subway, Pizza Hut, KFC, Europcar or Burger King and high streets in our towns and cities would look very different. The franchise model has enabled these companies to expand quickly …
Is my business ready to franchise?
This is a huge question and in these archives we will elaborate more on what you need to consider before you ask yourself should I franchise my business but here are some of the key points to consider is my business ready to franchise;
What is a standard franchise agreement?
What is a Standard Franchise Agreement? A standard franchise agreement is a legal document drawn-up by a specialist franchise lawyer. A franchise agreement details the legal responsibilities and obligations of both the franchisee and franchisor. A standard franchise agreement falls under one of two types. Standard franchise agreement allows an individual or individuals to trade …
What is a Master Franchise and what are the benefits of a Master Franchise?
Master franchise Opportunites: What are they and why you should consider investing Although the basic concept of franchising is relatively simple, the model can become somewhat more complex when implemented in a real-life business setting. Different businesses use the franchise model in slightly different ways, with many adapting the basic principles of franchising to suit …
What is franchise operations manual?
Franchise operations manual – This document records all day to day operations and forms part of the franchise agreement
Is franchising right for my business?
Franchisee & Franchisor relationship – Working with franchisees rather than staff is a completely different dynamic, they are business partners, not employees and the relationship will usually be a min of 5 years.
What is franchising?
First things first; what exactly is franchising and how does the franchise model work? In a franchise agreement, a business owner (the franchisor) grants an entrepreneur (the franchisee) the right to run a business under their brand’s trade name, using its business model, strategies and products.
7 steps you must take to franchise your business
So, how do you turn your business into a franchise? Here are the seven key steps you should take:
Turn your business into a franchise
There you have it, the seven key steps to franchise your business. Hopefully, you’ll feel more confident about starting your new venture now, but if you want to learn more about running a franchise, we’ve got plenty of resources for you.
How do I franchise my business?
Taking the first tentative steps on the road to franchising can be somewhat daunting…
Want to know more?
If you want to find out about our Franchise my Business services, or if you would like a free review of your business without cost or obligation, contact us today.
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Rod Hindmarsh commits every moment of his time ensuring every franchisor is satisfied, if it’s not assisting them to becoming a franchisor it’s chasing potential franchisees. Rod is continuously on the go and always has time to meet with everyone. A pleasure to have Rod market my franchise. Keep up the good work.
