There are several ways to grow your business. If you have a strongly reputable brand and business system that can be replicated, franchising your business may be an option for expansion.
It can provide you with a way to grow faster without having to open more branches yourself.
Careful consideration should be given to the following factors that may influence your plan to franchise:
1. Business procedures
You should know clearly how your business is run including dealing with issues as you will usually require your franchisees to run their businesses in the same way.
You must prepare an operations manual documenting processes and procedures to enable your franchisees to carry out the day-to-day running of their businesses in accordance with your business system.
2. Brand protection
Your franchisees will be identified with your brand name. Creating a portfolio of trademarks will strengthen your brand.
It will give you protection against others who may want to copy your brand.
In determining what aspects of your business need protection, you should look for any distinctive features that your brand would be recognised with such as your brand name, logo, specific colours, or unique words.
Trademark registration can take several months which should be factored into your expansion plans and if you have not protected your mark, what are you waiting for?
3. Pilot operations
How do you know your operations manual and business works without you? You should test whether your business system can be run successfully by someone else in a different environment.
You can carry out the pilot operation either on a new business owned by you or a franchisee who you may opt to offer preferential terms for the purposes of learning how to make your franchise more successful.
You should run the pilot for at least a year whilst documenting and analysing their trading results, how well your system is working and any actual or potential issues arising.
Providing your franchisees with training is one of the best ways to ensure success. During the pilot operation you should also determine what areas the franchisees will require to be trained in.
Selling your franchise
To be able to start selling, you will require a franchise agreement. This is a legally binding contractual agreement between you and the franchisee. It gives the franchisee the right to use and trade under your brand name and you as the franchisor get to control the running of the franchise.
Along with growing your business as a franchise, you will also have the responsibility to overlook your franchisees and the smooth running of their businesses.
At Carter Bond Solicitors we have the expertise to guide you through the franchising process, assisting you with the protection of your brand as well as preparing franchise agreements.
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