Are You Ready to Franchise Your Business?

Franchising is just one choice to consider when deciding how to expand a business. It is a good choice for many companies, but may not be the best option for everyone. Starting a franchise system can be like starting a new career, with its own different challenges.

If you’re ready, you should also decide if the timing is right, because franchising a business prematurely can yield unwanted results. So how do you know if you and your business are ready for franchising?

Ask these initial questions :

1. How successful is your business?

2. How unique is your business?

Look for the distinctive advantages of your business, whether you’re selling incredible meals, useful products, a valuable service, or something else. You’ll need to offer something that gets customers to choose your brand over your competitors, at least some of the time.

How is your gym, restaurant, store, or service different, and better than others? Does your business model provide faster or lower priced services or products, than those your customers can find elsewhere? Your franchise should stand out in some way.

3. How will you teach others to duplicate your business model?

Franchising means duplication of your business at other locations. Can you teach others how to build and operate the business in different places, for different customers? Can your vendors and suppliers provide the same services and products you rely on, to your franchisees? For your franchise to work well, this will be important.

4. How well do you understand the market for your service or product?

Your business must operate successfully today, and must also meet customer desires and needs for many years in the future. Look beyond the here and now. Will your business be just as successful in Wichita and Miami? Will consumers still need your product or service five or more years from now?.

5. What’s the franchisee’s profit margin after paying fees to you?

Franchisees invest heavily in your business model by starting up their franchised business, and paying royalties and other fees to you. They bear the cost for employees, real estate, equipment and more. You need to know they will make a meaningful profit and enjoy a return on their investment, even after paying the initial fees, royalties, advertising fees and other charges due to you as the franchisor.

If your answers indicate your business model is ripe for franchising, the next step is to talk with experienced legal counsel to guide you through the legal process.

Preparing to Franchise Your Business

Our Franchise & Distribution Practice Group has experienced franchise lawyers with the know-how to prepare Franchise Disclosure Documents in compliance with the laws that regulate sales of franchises, and also in accordance with related areas of law pertaining to trademarks, licensing, real estate, entity formations and other business transactions and litigation.

Three of our attorneys are Certified Specialists in Franchise & Distribution Law, as designated by the State Bar of California Board of Legal Specialization (currently fewer than 60 California lawyers hold this distinguished credential). Our lawyers have been asked to provide expert testimony in franchise disputes, and have served on committees for state and federal franchise law.

Read more regarding their credentials here: Franchise & Distribution Law Certified Specialists.

Click: Franchise & Distribution Law Certified Specialist to email us now.