Franchising, which is one method of expansion, has become increasingly popular in the past three decades. There is no doubt as to its success but the important questions are whether it is right for you and whether you are ready to be a franchisor. To help you answer those questions, let’s explore what being a franchisor requires, mentally, physically and financially. No one should enter into franchising with a professional franchise consultant or coach. Profran Consultants, Inc. provides what is considered by many the best consulting and development services in the nation.
You first need to appreciate that franchising is a business in and of itself. Your existing business ( the underlying concept which you need to franchise ) is another business. It’s a necessity , therefore , for you to begin adjusting your thinking to the new business at hand . It is, naturally, profitable to have a completely unique or superior product or service idea to offer to the public ; however [*COMMA] it will not hold up well without a good franchise system built around it. Inversely, some less than excellent ideas have made a name for themselves as a consequence of a superior franchise system.
The offer of a franchise is subject to state and federal rules. The penalties for failing to comply with those laws can be damaging both to our pocketbook and your reputation. You must present prospective franchisees with a specially prepared disclosure document ( known as an offering circular ) in strict acceptance of those regulations at least 10 business days before they sign the franchise agreement or pay you any cash. There are also 15 states that may require you to register the offering and submit the declaration for review before promoting can occur inside their jurisdictions.
Similarly, any sort of advertising which is employed to solicit a prospective franchisee must comply with governmental regulations.
Though Fed and state regulations do considerably repress your capability as a new franchisor to point out the income potential of an outlet to a prospective franchisee, it is still smart to have a prototype of the typical outlet in existence in order to show the feasibility of the theorem and your actual hands-on experience in its operation.
To be a successful franchisor, you have to be committed to meet these and other necessities. [**] it is truly possible for you to try this in an efficient demeanour with a bit of help from people experienced in the franchising process – so long as they have your own interests at heart.
You have, without doubt, heard of the fantastic sums of money which a franchisor may gain from a franchise system by way of the initial franchise fee, monthly royalty payments and contributions to the advertising budget from franchisees. Although you may eventually realize great income from your franchise system, the road leading in to that result could be costly. We believe in teaching the client to do or oversee as much of the work the customer is willing to do himself. This will save the client a healthy portion of the costs which some development and consulting firms charge. The major advantage is that the client receives a greater understanding of what franchising is all about and receives first hand training on how to become a quality franchisor, rather than relying on others who may not have your total interest at heart.
Proper franchise development does take time. Relying upon the level to which you wish to plug your offering, you should be prepared to devote half a year to one year to that task. Don’t expect to create the required documentation overnite and head direct to marketing. You must be trained to think and act like a franchisor, to learn the new business that you area in and the needs that it entails and to make perceptive, informed calls relating to the structure of the franchise system. In addition, registration of your offering with a state regulatory agency can take a fair deal of patience and time.
Who should you opt to develop your franchise system? Profran Consultants has the experience and track record to take you through each aspect of franchise development. Request an one hour’Free’ consultation today! Ken Hollowell has over 30 years experiences in franchise development.
One franchise Ken is very excited about is Skadoit. You may want to take a serious look at this franchise.
Ken Hollowell has been consulting with potential franchisors for over 30 years. As of 2009, Ken has developed over 800 different businesses.