how to turn my business into a franchise

How to Successfully Turn Your Business Into a Franchise

• Develop a growth plan Next, put together a strategic plan with clear and measurable goals. ...
• Find opportunities to simplify operations Good growth plans are important to support expansion. ...
• Ensure your franchise benefits both parties The shared investment of a franchising model provides benefits to both the franchisor and franchisee alike. ...

Full Answer

Should I buy a franchise or start my own business?

Buying a franchise is very different from starting a mom-and-pop business. Since there is an already established system in place, there is a higher likelihood of success. If you invest in a proven franchise opportunity and follow the system the franchisor has put in place, you should be on your way to running a successful business.

How to successfully franchise your business?

• Present Your Business to Potential Franchisees. After identifying your goals, you may now sell your franchise business model to your prospective franchisees.
• Provide Hands-On Training. If you have a vision for your franchise business, your franchisees must share the same objectives with you.
• Work On the Ground. ...
• Implement The Organizational Culture. ...

How much will it cost to franchise my Business?

There are currently 14 registration states with franchise registration fees ranging from $250 to $750 plus additional legal fees leaving you potentially $15,000 to $25,000 out of pocket. A Federally Registered Trademark will set you back $1,750 to $7,500.

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.

How much does it cost to turn a business into a franchise?

How much does it cost to start your own franchise? Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.

Can any business be franchised?

If you have a professional type of business that requires some type of license or certification and you have created a different and/or unique way of offering services your business can absolutely be franchised.

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.

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.

What qualifies a franchise?

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.

Do franchise owners have to work?

Owning a franchise unit can be demanding, requiring work of 60 to 70 hours a week, but owners have the satisfaction of knowing that their business's success is a result of their own hard work. Some people look for franchise opportunities that are less demanding and may only require a part-time commitment.

Can franchisees get rich?

The bottom line is that while a franchise can make you independently wealthy, it isn't a guarantee. Choosing the right business in the right industry, and going in with preexisting entrepreneurial experience and/or existing wealth can help, but your income-generating potential may still be somewhat limited.

Do franchise owners pay taxes?

States charge businesses franchise taxes for the privilege of incorporating or doing business in the state. Franchise tax is different from a tax imposed on franchises. And, it is not the same as federal or state income taxes. Business owners must pay franchise taxes in addition to business income taxes.

What is the most profitable franchise?

Top 14 Most Profitable FranchisesMcDonald's. Units in operation: 39,360. ... Dunkin Donuts. Units in operation: 12,800. ... Taco Bell. Units in operation 12,800. ... Subway Franchise. Offers Financing: Yes. ... Anytime Fitness Franchise. Units in operation: 4,904. ... Sonic. Royalty: 2.5% - 5.0% ... Planet Fitness. Royalty 7.0% ... Orangetheory Fitness.More items...

What are the disadvantages of franchising?

Buying a franchise means entering into a formal agreement with your franchisor. Franchise agreements dictate how you run the business, so there may be little room for creativity. There are usually restrictions on where you operate, the products you sell and the suppliers you use.

Is it profitable to franchise your business?

Buying a franchise might seem like easy money, but those royalties and fees will quickly cut into profit margins. The majority of franchise owners earn less than $50,000 per year.

Is franchising a good investment?

If you are truly an entrepreneur, you should never invest in a franchise. While franchisees own their own businesses, are not employees of the franchisor, are at risk for their capital invested in the business, and manage and operate the business on a day-day-basis, franchisees are not really entrepreneurs.

Can a product be franchised?

A product and trademark franchise is often referred to as a “product distribution” franchise because the relationship between franchisee and franchisor can be described as a supplier-dealer relationship.

How can you say that a specific business is Franchisable?

To franchise, a business must generally be able to thoroughly educate a prospective franchisee in a relatively short period of time. Generally speaking, if a business is so complex that it cannot be taught to a franchisee in three months, a company will have difficulty franchising.

Is it better to operate a franchise than start your own business yes or no support your answer?

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. It may cost less to buy a franchise than start your own business of the same type.

Is a special type of licensing arrangement in that it involves the right to use a business model which necessarily includes the right to use the intellectual property rights?

In short, franchising is a special type of licensing arrangement where the right to use the business model is supported by a li- cense to use the intellectual property rights associated with that business.

What is franchise infrastructure?

Franchise infrastructure includes everything your franchisees will need to open and operate a successful business, including a franchise disclosure document, franchise agreement, operations manuals, brand policies, training and support, and more.

How many years of experience does accurate franchise development have?

Accurate Franchising has thirty years of experience in franchise development. Contact us today to find out how to convert your business to a successful franchise.

Do I need a business plan to expand my franchise?

Don’t forget that you’ll need sound financing to convert a business to a franchise, or to expand an existing franchise. You’ll need a business plan to show prospective investors how you will use their money to provide a fair return, and you may also need access to reliable funding sources. AFI helps our clients craft clear, comprehensive business plans that can be presented to private investors or to our qualified financing partners.

What Are the Franchise Laws and What Is a Franchise Disclosure Document?

Franchising is regulated and requires compliance with federal and state franchise laws.

Does My FDD Have to Be Registered or Filed?

The answer depends on where you will be offering and selling franchises. At the federal level, the FDD is not registered or filed with a government agency. Although your FDD must comply with federal law and the Federal Franchise Rule, compliance is self-regulating, which means that it’s up to you and your franchise lawyer to make sure that your FDD is properly prepared and issued. At the state level, in the franchise registration states, your FDD must be registered with the designated state regulator before you can offer or sell a franchise in that state. In the franchise filing states, you must make certain filings with the designated state regulator before offering or selling a franchise in those states. In all other states, you may offer and sell franchises as long as your FDD is current and in compliance with federal law.

How Long Should It Take to Franchise My Business?

Typically, franchising your business takes from 90 to 120 days. Depending on unique factors related to your business or industry, there could be variations. A lot also depends on who you are working with and your internal team.

Do I Have to Work with a Franchise Lawyer?

If you are going to franchise the right way, you need to work with a lawyer who specializes in franchising and who is experienced in working with new and emerging franchisors like you.

Can a Franchise Developer or Consultant Prepare My FDD Instead of a Franchise Lawyer?

No. Your FDD is a legal document that requires the integration of federal and state-specific franchise laws and regulations and should only be prepared by a qualified franchise lawyer.

How Do I Get Started?

By reading this guide, you’ve already taken the first step! Now that you have a solid foundation as to what franchising is all about and the steps involved, start building the right team to help support and guide you in franchising your business .

How long do you have to give FDD to franchisees?

It’s required by federal and state law and is the legal foundation for your franchise. You are required to give prospective franchisees your FDD no less than 14 days before signing any agreement with a franchisee or accepting any payments from a franchisee.

What is a franchise business?

A franchise is a type of business model where the original business owner owns all of the legal rights to the business but can use the trademark to others as part of the franchise. If a person becomes part of the franchise, they have the legal right to use your trademark, logo and business practices. Before you become a franchise, you will have to research:

What is UH Small Business Development Network?

The UH Small Business Development Network is here to help. Our business advisors will help you grow your small business, increase your bottom line and develop expansion plans. All advising sessions are at no cost, confidential and one-on-one.

What is included in a business prospectus?

Many things can be included in a business prospectus, such as your marketing strategies, location strategy, and a transparent royalty fee and franchise structure.

Why is a business plan important?

A business plan is crucial for when you’re just getting started and for when disaster strikes. However, it can also be essential for business owners to replicate their success in a second, third, or even fourth business.

Why screen a candidate?

Screen them appropriately to ensure they are a sound candidate for contributing to the excellent business reputation you’ve worked hard to build.

Is it a dream to start a small business?

Franchising a small business is a dream of many entrepreneurs, and is also one of the soundest options for growth without cutting into your bottom line with overhead costs.

Is Ashley a mom?

Ashley is, first and foremost, a mom to an amazing young son and a wife. Ashley has started and sold a couple of small companies over the last many years, and now has decided to take some time off to spend time with her family, and raising her son. Ashley managed a team of 11 staff and intends to start another business shortly. Ashley is an avid saver and investor and is knowledgable about not only entrepreneurship but, also investing.

Is it better to franchise a business or expand it?

Franchising your successful small business can be a way around that. You get the business expansion you desire, but the franchisee is fronting the money for your growth, which decreases your investment amount and your liability.

Who reviews franchise documents?

As there can be a lot to manage and so much legislation to follow, it can be worth having all your documentation reviewed by industry professionals, such as franchise attorneys.