How to Prepare a Company to Franchise
by Ed Teixeira
A number of business owners consider franchising as a possible strategy for
growing their company. However, considering a franchise program is one thing and
making the decision to actively proceed is another. Before moving to a franchise
operation, there are certain steps that should be taken to prepare the company.
Each year numerous business leaders look to a franchise model as a way to grow
and add value to their company. Some of these companies become successful
franchisors, while others remain mired in mediocrity never to add more than a
few franchisees to their network.
Companies that consider franchising as a future strategy need to prepare by
taking certain steps. The advantages of this strategy are that even if a
franchising program isnít implemented these actions will still provide benefits
to the company. First of all, a company needs to determine if their business can
This article includes a list of important questions to answer before making a
decision to franchise.
If the answers to the questions are positive and the decision is made to
eventually franchise then here are the preliminary steps to take:
- Write a franchise business plan with timetables, financial
projections and operational requirements. Costs for consulting
services, legal fees and other expenses can be estimated with
- Consider a licensing model as an alternative to franchising
or to transition into a franchise program at a later date.
- Document policies and procedures for operating the business.
This will serve as the basis for the franchise operations
- Develop an operations manual that can be used as a training
manual and will serve as the basis for the future franchise
- Plan on establishing product/services that can be replicated
and integrated into the franchise program.
- Implement social media programs such as Facebook and Twitter
that can be expanded and assimilated into the franchise program.
- Identify staff with particular skills that could be used in
the franchise operation. Important positions include training,
operations and sales.
- Key executives should learn about all facets of franchising
including starting up, developing and operating a franchise
company. There are ample resources available.
- Have a platform for a website that can be built on.
- Be cautious about how territories/markets are developed.
Consider corporate locations that can be franchised in the event
a franchise program is established.
- Identify the source of the required capital needed to
establish, launch and operate a franchise program
Companies at the preliminary stages of franchising would be well served to
prepare the company before jumping in with both feet. Establishing and launching
a new franchise is costly and has certain risks. If a company has a business
that can be franchised then laying the foundation for the new franchise is the
© 2011 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at email@example.com