Can My Business Be Franchised?

To many business people the prospect of franchising their business seems a good idea, however getting started is more difficult.

There are a number of decisions that need to be made and it is important to seek the right professional help to help you make those decisions in an informed way.

Can My business Be Franchised?
Franchising is an excellent method of expanding a business, however there are a number of key criteria that need to be in place. If these criteria are not in place it may well be that a different method of business expansion and growth is more appropriate.

The main criteria in determining whether your business can be franchised is:

	The business should be distinctive both in brand image and operating system.
	The business must be proven to be successful.
	Is there a steady demand for your products? Has that demand been tested at different locations?
	The system must be capable of being passed on successfully and reasonably easy to learn.
	The financial returns must be sufficient to enable the franchisee to earn a reasonable reward for his efforts, pay the franchisee fees and provide a reasonable return on the assets employed within the business.
	Do you have sufficient funds to cover the cost of developing a pilot operation and developing the franchise?
	Will the Franchisor be able to make a profit from the management fees paid by the Franchisees?
	Are you able to devote the time to the business that will be required to develop a successful franchise operation.

This is not an exhaustive list but will form a starting point.

Franchising is not a method of propping up an ailing business. It is also not an easy way to earn quick money. Building a successful franchise network will require a proven business format and a commitment to build and support your franchisees.

Professional Help
You will need to appoint a franchise consultant to guide you through the initial hurdles and help with the growth and development of the franchise network. You will also need to appoint an experienced franchise lawyer to set up the right legal framework.

This site includes pages for Consultants and Lawyers where they explain their role and the service that they can provide.

The Consultant's role
There are some people in business that will not see the need for consultants, however their initial role in developing a successful franchise is very important.

A consultant will help you take a dispassionate view of your business and will help you to draw up a franchise blueprint. This will normally form part of a feasibility study, which will look closely at whether your business can be franchised and the changes needed in your management structure to support a successful franchise operation.

The blueprint will set out guidelines as to the size of your franchisees areas, the amount of equipment that they will need to purchase to set their business up and the price structure for the franchise.

They will also assist you in setting up a pilot operation whereby you can test the effectiveness of your franchise system. The franchise pilot operation should be run at arms length as a separate entity. The lessons learnt during the pilot operation will enable you to fine tune your franchise system and the franchise manual.

The consultant will help you to develop the recruitment campaign which will need to include brochures and advertising materials and may include help with the initial interviews. Together with the consultant you will develop a profile of the type of franchisee you wish to recruit and the key skills they should have.

The operations manual is one of the keys to successful franchising and should be developed from your own experience and sets out exactly how the business should be run to ensure success. Your consultant can help with this and there are many lessons that should be included from the pilot operation. There are also consultants that specialise in manual creation

The Lawyers Role
A specialist franchise lawyer will work with you to establish the proper legal framework for your franchise. In particular he or she will:

	Prepare a confidentiality agreement that will help to keep your information secure
	Prepare a full detailed franchise agreement
	Prepare licence agreements providing franchisees with the right to trade utilising your business name and trade marks.
	Refer you to trade mark agents who will register and protect your business name not only in the UK but Worldwide if required
	Ensure that you comply with European legislation that effects franchising.
	Deal with any property matters
	Have a look at our professional advice pages for more detailed information.