how to implement franchising

6 Steps to Franchising Your Business

Full Answer

What to do if people don't know your business exists?

7. Focus On Customer Retention.

How to get word out about your business?

You'll want to use your marketing budget to get the word out about your business in every way you can, from social media advertising to direct mailers and billboards . You may have the best-run franchise in the world, but if people don't know your business exists, and especially if you don't have a brand name that the world recognizes (such as McDonald's or Burger King), they won't pay you a visit.

Can you cut corners in a franchise?

You can't cut corners in any franchise or in any industry. Even getting the little things right, like finding a consistently friendly receptionist, is very important. Customer reviews on Yelp and other social media sites can make or break a business.

Can you be successful if you buy a franchise?

But obviously, just because you buy a franchise doesn't mean you'll be successful.

Do business owners want to franchise?

Many business owners want to run a franchise, and for good reason. You have your own business, but you're also buying a business system — one that you know works. Instead of starting a business that could bomb in a few months or years, you're buying a business that has worked elsewhere and presumably will work in your community.

Is franchising hard?

We all know that franchising is hard, and it's important to do your due diligence and so on. But still, you don't know what you don't know. Your community may not have enough people that fit the target demographic to support whatever franchise you're interested in. Or maybe there are too many restaurants or automobile service garages or whatever you're thinking of buying.

How much does it cost to start a franchise?

Franchise costs vary widely depending on the industry and business you choose to invest in, not to mention where you live or plan to do business.

What to do if you don't have a franchise?

If you don’t have the initial investment costs at the ready, you may need to tap into outside financing to launch or run your franchise. Many banks, the SBA and franchise-specific lenders offer financial help for would-be franchisees. Other options include crowdfunding or lenders based entirely online.

How long do you have to get a copy of your FDD before signing a contract?

The franchisor is required to provide you with the FDD at least 14 days before you sign a contract, though it’s a good idea to request a copy earlier in your initial phases of research. You can typically download a PDF of the FDD, though some franchisors might be willing to send you a hard copy. 5.

How to get a copy of a franchise disclosure document?

Reach out to the franchisor for a copy of its franchise disclosure document (FDD), which contains detailed legal information about its franchise group along with financial data like the average gross revenue of its locations.

Why do you need a business plan?

A business plan is necessary if you plan to apply for a loan to help with startup costs. Lenders want to know that you have a viable plan for turning a profit and sustaining your business over the long haul, because it helps them evaluate whether you’ll be able to pay it back.

How long does a franchise contract last?

Franchise contracts come with terms of five to 20 years. At the end of the term, you can often choose whether to renew the contract or discontinue your franchise. At contract signing, you’ll likely need to also pay any upfront fees or initial investment expenses.

Why is my business being audited?

There’s also a higher chance than usual that your business will be audited, because the IRS views ROBS as a tax strategy — basically, a way to avoid paying taxes.