If you are a small business owner who is interested in franchising your company, it may be a possibility, but one that takes some work on your part. Before you can franchise your business, you have to create various documents addressing finances, marketing, operational processes and more.
How To Franchise A Business Step By Step:
Create a financial history. One of the primary reasons a potential investor buys your franchise is because the business is productive and lucrative. Maintain financial records that show how profitable the business is yearly and the consistent rate of returns year after year in order to entice potential purchasers into buying into your business.
Create an operational manual. A franchise offers a blueprint to buyers on how to run the business, which requires you to document your daily business operation processes. Create a manual that is separated into sections to cover every aspect of running the business, from how to structure the business (corporation, partnerships, sole proprietorship or LLC) to what specific tasks need to be performed each day in order to achieve the income shown in the financial documents for the business.
Create a marketing manual. In addition to the operations manual, you also have to document your marketing strategies and collateral. Create a manual that includes a complete marketing plan for each year of the first five years or so the franchise is in business. The manual typically includes marketing templates for advertisements, signs, a website and other marketing collateral that the franchise buyer can use.
Create a franchise agreement. Work with an attorney to draw up a franchise agreement. The franchise agreement is the legal agreement between you and the buyer of the franchise. The agreement clearly states what the buyer provides to you as part of buying into the franchise, and in turn what you are obligated to provide for the buyer. The agreement also lists an up-front fee and any ongoing payments made to you by the buyer.
List your business on franchise sites. A myriad of franchise listing sites exist online, where you can list your business franchise according to the industry or category it fits. Prospective franchise investors search these sites to find business franchises that may be of interest to them.
By Kristie Lorette, Demand Media http://smallbusiness.chron.com