December 19, 2023

Creating a Plan to Franchise Your Business

You probably had a plan when you started your business, and creating a franchise plan is also recommended to begin your brand’s expansion. To design a successful franchising plan, consider these six steps to help create your plan to franchise:

Evaluate your brand’s readiness

Before franchising, make sure you have a proven business model, loyal customer base, and strong brand identity. Evaluate your target market, define your unique selling proposition, and think about your ability to support franchisees. Determine if franchising is the right growth strategy for your brand.

Industry research

Gather info on your industry, market trends and franchised competitors. Conduct an analysis to identify strengths and weaknesses, as well as the market opportunities and threats. If needed, streamline your product or service offering, and firm up your pricing strategy with franchising in mind – you will want to make sure there is enough margin for franchisees to pay royalties.

Seek legal and financial advice

Franchising involves complex legal and financial considerations. You will need a franchise attorney to complete the legal requirements and ensure compliance with franchise laws set forth by the Federal Trade Commission (FTC) and your state. Additionally, make sure your bookkeeping is in order, with clear records of past financial performance with P&Ls and tax returns.

Refine your local marketing

Look back on your marketing and clarify your ideal and target audience while evaluating the performance of the marketing channels you have used. Think about how potential franchisees will follow your lead in their market. Curate the best content to develop sales for their independently owned franchise.

Consider the ideal franchisee

Develop a thorough selection process to identify who might be a qualified franchisee. You want people who align with your brand values and culture, not just the necessary skills and resources to successfully operate a franchise. You will want to meet them, get to know why they are interested in being a franchisee, and carefully evaluate their financial readiness.

Prepare to monitor performance

You will want to continuously monitor the financial performance of your brand. You will need to evaluate revenues and margins and provide ongoing support. How will you assess performance to ensure franchisees are meeting brand standards and achieving business goals?

By utilizing these steps, you can evaluate your brand’s readiness and create your franchising plan. Franchising can be rewarding as you empower franchisees to achieve their own success and achieve their goals under your leadership.

We know this list is extensive and may sound like a huge undertaking. This is why SMB Franchise Advisors has a team of subject matter experts to support clients. We have a comprehensive process to get you from start to finish, not only in preparing to franchise but all the way through launch and growth. No matter where you are in the stages of franchising your business, reach out with any questions you have. We can help you evaluate the franchisability of your business and provide guidance on the best next steps.