To design a successful franchising plan, consider these six steps to help create your plan to franchise:
Evaluate your brand’s readiness
Before you dive into franchising, ensure that your business is truly ready. This means having a proven business model, a loyal customer base, and a strong brand identity. Assess your target market and define your unique selling proposition. Just as importantly, ask yourself: do you have the systems and capacity to support franchisees? Franchising is a fantastic growth strategy—but only if the timing and foundation are right.
Conduct industry research
Knowledge is power. Study your industry, analyze market trends, and understand your franchised competitors. What are their strengths and weaknesses? What market opportunities and threats do you need to account for? Use this research to refine your product or service offerings and adjust your pricing strategy. Remember, your pricing must allow enough margin for franchisees to cover royalties and still turn a profit.
Seek legal and financial guidance
Franchising is a legal and financial undertaking with its own complexities. Partner with a consulting team who has relationships with the franchise attorneys to meet Federal Trade Commission (FTC) and state-specific compliance requirements. On the financial side, ensure your bookkeeping is rock solid. You’ll need clear, well-documented financial records—including profit-and-loss statements and tax returns—to demonstrate your business’s viability to prospective franchisees.
Refine your local marketing
Great marketing sets the stage for franchise success. Reflect on your past campaigns to identify what’s worked well. Define your ideal customer profile and determine how franchisees can replicate that success in their markets. By curating proven marketing strategies and content, you’ll set franchisees up for strong local sales and customer loyalty.
Consider your ideal franchisee
Franchise success depends as much on the people you partner with as the systems you put in place. You will develop a thorough selection process to identify franchisees who align with your brand values and culture and other qualifications. While skills and resources are important, finding candidates with the right mindset and dedication to the business is essential. Take time to meet candidates, understand their motivations, and assess their financial readiness.
Prepare to monitor and support performance
A successful franchise system requires ongoing oversight and support. Consider processes and tools for monitoring franchisees’ financial performance, ensuring they meet brand standards, and achieving business goals. Think about how you’ll provide the guidance, tools, and training franchisees need to succeed—because their success is your success!
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.
