From business to franchise in 6 steps

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Moving from a small business structure with only a few sites, to franchising your idea out and selling it can sometimes be a huge step, but with proper organization, it doesn’t need to be such a difficult task.

Step one: Know your businessThe information you pass onto a franchisee needs to be precise and thorough. Business owners often run their companies from their own knowledge or intuition, however, it may become difficult for them to pass this on without have a clear structure documented on how things work. Every step and every process must be clearly outlined. This can be organised via a Standard Operating Procedure (SOP) manual. The best way to do this is through a software application.

Step two: Know about legalities and the law. All business owners looking to get into franchising business need to pay close attention to laws and guidelines around becoming a franchisor. This includes financial performance information, and whether everything is in order for a business to become a successful franchise. Legal complications can arise if preparation is rushed and not thoroughly worked out.

Step three: How do you want to grow? A potential franchisor needs to know how much they want to grow, or they need to know how much they can grow in the beginning. They need to scale or upscale at as reasonable rate. Growing at the natural growth rate of your business is the best way to expand. Moving into unfamiliar territory can sometimes be too risky.

Step four: Plan and screen franchisees. Not just anyone should be accepted as a franchisee. As a franchisor you have the power to screen people and choose the type of people that you would like to be representing your brand. Have a system in place to ensure that they’ll progress your company in the right direction and market.

Step five: Set clear and relevant restrictions. After providing a process which includes instructions, standard operating procedurestrainingrecruitment and other processes, there should only be an allowed list of freedoms. Franchises will all have unique ideas about what type of restrictions they are going to place on their franchisees, but the end goal is always to grow and develop a brand.

Step six: Support the franchisees. Even if your end goal is to remove yourself from the daily business of franchises or even your own business, it is ideal to get to know each of the franchisees. A franchisee is different to other types of small business owners. They are generally part of a huge corporation, or they own other brands and franchises. They are only responsible for a small part of a company in one area, yet there is a large corporate structure which governs them. They require support and guidelines from this structure. One way in which they are supported is through Standard Operating Procedure or SOP guidelines. This is often communicated via software online, so that updates can be rolled out simultaneously among franchises.


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