There arrives a time in the development of every business that a choice has to| choice must| decision needs to} be made concerning whether or not to expand to reach a larger marketplace and, if this is so the best method to reach that goal. Franchising, which is one strategy of enlargement, has become more popular in the previous 3 decades. There is no doubt regarding its success but the important questions are whether or not it is right for you and whether or not you are prepared to be a franchisor. To help answer those questions, let’s explore what being a franchisor requires, mentally, physically and financially.

You first need to appreciate that franchising is a business in and of itself. Your existing business ( the fundamental concept which you would like to franchise ) is another business. It is necessary , therefore , for you to begin adjusting your thinking to the new business at hand . It is, of course, beneficial to have a unique or superior service or product concept to offer to the public ; [**] it won’t hold up well without a good franchise system built around it. Inversely, some less than superb concepts have made a name for themselves as a consequence of a superior franchise system.

The single most crucial side of any franchise system is the trademark or service mark which is being licensed to the franchisee. Your first priority should be to design a completely unique mark by which your franchise system and its goods will be identified. You then must search the files of the central government and the states in order to determine whether anyone else is presently using the same or a similar mark. If you’ve got a green light, you must go on to secure a registration of that mark for yourself. Your franchise agreement must shield your interest in those marks and you need to set up stern and well implemented standards for the franchisee to follow in order not to endanger those marks.

The offer of a franchise is subject to state and Fed. laws. The penalties for failure to comply with those laws can be damaging both to our pocketbook and your reputation. You have to present prospective franchisees with a specially prepared declaration document ( known as an offering circular ) in strict obedience to those laws at least ten working days before they sign the franchise agreement or pay you any cash. There also are fifteen states that might need you to register the offering and submit the declaration for review before selling can occur inside their jurisdictions. Additionally, any form of advertising which is used to solicit a prospective franchisee must obey governmental rules.

There is more to being a franchisor than simply having a franchise agreement and an offering circular. The franchisees who receive that notification and at last sign the accord must be trained to operate an outlet in an organized manner. Therefore , an operations manual must be prepared and a training program should be in place. A staff of qualified individuals who will run the franchisor’s organization and train the franchisees must be assembled. Once more, remember that franchising is a different business. Thus any existing manual which simply summarizes the daily conduct of your present business may not be adequate to explain to a franchisee how she is to operate your idea. You must develop a program of continual field support to assist franchisees with issues which they may confront in daily operations of the outlet. The team assigned to that function will also monitor and report on the franchisee’s compliance with your standards. The creation of an aggressive advertising campaign to plug your franchised outlets and the image which you wish them to convey to the market is of utmost significance.

Although federal and state rules do considerably repress your capability as a new franchisor to show the income potential of an outlet to a prospective franchisee, it’s still smart to have a prototype of the typical outlet in existence in order to indicate the feasibility of the idea and your actual hands-on experience in its operation.

It is also advantageous from a sales perspective to have an actual facility which a prospective franchisee can visit since you will be engaged in a new business ( franchising ) ; your present business should be secure enough to function without your daily collaboration. Likewise, don’t expect to raid the ranks of your present organization to staff the new business. Remember, they have got to be replaced.

Ken Hollowell is considered one of the countries leading franchise specialists. Ken has developed over 800 different franchise firms during the last 35 years.

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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

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Franchise legal documents

in order to sell franchises it is necessary to first have a Franchise Disclosure Document and Franchise Agreement. These are parallel documents that mirror one another. The FDD explains, in everyday language, the main points of the franchise program, while the Franchise Agreement is drafted in legal wording, and is what essentially ties the franchisee to the program. The FDD must be written in an exceedingly specific format, in a prescribed order, and must contain the precise disclosures as needed by the federal Trade Commission.

There are’do-it-yourself’ packages for the preparation of these documents, but in our perspective, this is a poor way to develop franchise documents. Preparation of the franchise documents involves properly establishing many program variables, the discovery of much detail, which comes from several hours of interplay with the person preparing them. You do not wish to make a howler with your franchise documents. New franchisors need advice, direction, consulting, and assistance from someone who has in depth experience in the preparation of franchise documents. This may be a franchise advisor or a franchise attorney.

The Operations Manual

Franchisors are needed to provide training to their franchisees, and are required to give an Operations Manual to the franchisees, routinely at the time that training begins. The Operations Manual should be written to the’least experienced’ franchisee, and should contain, at a minimum, sections about the franchisee’s relationship with the franchisor, opening the business, operating the business, the procedures categorical to the industry, recommendations and direction for hiring workers, and a series of operational and franchise forms for the daily function of the business. The Operations Manual is typically prepared by a franchise expert.

Marketing Program

you’ll need both electronic and printed reply materials. There are certain successful norms that have been settled in the franchise industry for the sort of materials used. You can get some samples from franchisors, decide on your own approach, and then hire a photographer and graphic designer to prepare materials for you. It’s not necessary to spend a large amount of cash on this part of the program, but the materials should look professional and should convey your message.

Advertising the Franchise Offering

There are many ways to advertise a franchise program. In the past, newspapers and print media were the most important way to generate leads, but these vehicles have become less effective. Over half of franchise inquiries now come from the Net. The issue is that there are tons of Internet sites offering franchises, and franchisors receive many casual investigations from folks who simply’check a lot of boxes’ on a number of sites, indicating interest in numerous different franchises.

We suggest that you establish a budget, maybe about a thousand bucks a month, depending on your development plans, select a few web sites, and then be prepared to receive lots of’chaff’ in which there will be some qualified leads. It’s been calculated that one net investigation in 60 actually buys a franchise. However [*COMMA] you cannot forget the web when selling franchises.

Selling Franchises

It is fascinating to sell franchises yourself, if you can. If you want assistance, there are many franchise brokers in the industry to help you. Many of them only generate qualified leads, while others basically become involved in the sale process. Use caution not to pay too high of a share of the franchise fee as a commission. If the commission paid is too high you’ll have inadequate cash remaining to adequately train and support the new franchisee during their startup period.

Managing and Supporting the Program

Good franchisors do everything possible to help their franchisees become successful. Each franchisee needs access to a franchise expert, who represents or works for the franchisor, to help them with daily Problems and questions. At the beginning the franchise owner or existing staff may serve in this roll. As more franchises are sold, it will be critical to hire someone. Your staff does not have to be massive and just some people can support many dozen franchises.

Your Next Step

Profran Consultants can teach you how to become a franchisor. Contact Ken Hollowell for a 60 minutes FREE consultation.

Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

Article Source:http://www.articlesbase.com/franchise-articles/managing-your-franchise-1330821.html