SMALL BUSINESS FRANCHISE ASSOCIATION. Franchising your Business Cheat Sheet. Little Black Book of Resources Small Business Franchise Association
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1 Little Black Book of Resources Small Business Franchise Association 2014 Small Business Franchise Association 1
2 Welcome Hi there! Thanks for downloading the Small Business Franchise Association s Franchising your Business ~ Cheat this is a very handy guide to help you to determine whether franchising is right for you & your business. I know that it is really hard to get your hands on any REAL information about franchising and what is involved but this guide will give you a check list as to what is takes to Franchise your Business as well as a guide to what is involved. Grab and cuppa and take a look Emma x A. What does my Business Need to be Franchisable? i. You need to have a profitable business In order to franchise your business your business needs to be profitable. You cannot franchise an unprofitable business or business model! You cannot take a struggling business and try to resuscitate it through franchising,that just does not work! ii. You need to have a strong brand identity You need to have a strong brand identity. It is not just about having a logo but you need to consider whether the whole of your branding is strong. You need to be have a uniformed look & feel to all that you do ~ from letterheads, social media, leaflets and everything in between needs to reflect the brand and provide uniformity. iii. You need to be in a position to protect your brand/branding From an Intellectual Property angel you need to be in a position to protect your brand/branding under the legislation relevant to your country. In the UK you would be seeking to register your trademarks etc with the Intellectual Property Office. More information of the UK system of doing this is available at I can say that the IPO office are extremely helpful so if you do have any difficulties do not hesitate to give them a call and they are more than happy to talk you through it Small Business Franchise Association 2
3 iv. You must have a business model which is transferrable Your business model must not be reliant upon you or the local area in which you work. It must not be reliable on the economics of your area, the Local Authority policies in your area or the fact that you have certain networks/influences. In essence, you need to be able to take your business model and know that it could be run as a successful business within any territory area which you are proposing to sell. If you are in the UK you need to be confident that the business model could work whether you are in the Highlands of Scotland or the centre of London. It must not be restricted by your geographic location or your networks. v. Can you teach other people to run the same business as you? This follows on from the point above. Can you teach other people to do what you do and to do it but can you teach those people who would fit your brand and be perfect franchisees how to run their business within your brand? All the knowledge and skill required to run your business must be able to be transfer to other people in order that they can run a successful business within the brand. vi. Do you have a WHOLE business model? Franchising your business is not just about allowing other people the opportunity to sale your products or deliver your services. There needs to be a whole business model behind that. There needs to be systems and protocols on how to do absolutely everything within your business. What is the system for accounting? Data Protection/Client Records? Taking Orders? Making bookings and taking payments? What are your best practice guidelines/protocols for social media, marketing, customer relations? vii. Are you ready for your role to change within your business? When you become a franchisor your role will change significantly in your business. You will no longer have the same amount of time to do what you do currently. Your time will need to be spent recruiting, training and supporting your franchisees. You will become your franchisees wingman ~ their business mentor, support system, advocate and teacher. You need to be ready for this and be happy to take on that role. You do not have to do all of this yourself and there are areas which you can outsource or have assistance in but ultimately your franchisees will be looking to you for advice, support and help. You know what it is like to run this business and you have the knowledge and experience to help them. Your franchisees will also expect you to be there for them as that is what they are paying you for. The most common compliant I hear from franchisees is that they are not afforded the levels of support that they were promised or that they had anticipated Small Business Franchise Association 3
4 In summary you need to have a business which is:~ Profitable Transferrable Teachable Legally Protectable With a strong brand B. What to do before Franchising your Business i. Do your research Spend some time studying the market place & ask yourself:~ Are other people franchising businesses in my industry? It does not mean that if other people aren t then you can t but it will give you a feel for what is happening in your industry Thoroughly research your brand name and whether there are any people trading under similar names. This is must easier now as you can spend time searching the internet. You do not want to invest masses of time & money on finalising and securing your branding to discover that there are people running businesses in other areas with the same business name as this will cause difficulties in the long run Take a look at other franchise businesses and spend some time studying what they do and how they do it. You certainly do not want to be copying what other people are doing/saying but it is important that you know which other businesses your prospective franchisees may be looking at when they are also speaking to you. ii. Develop your Brand If you do not already have your whole business branded then now is the time to do it. You need to have a uniformed look & feel throughout the brand. Consider the fonts which you use for correspondence, the images which you use on Social Media and the marketing materials which you use. If you need to have any design work done for the ultimate benefit of your franchisees [for example leaflets, business cards, posters etc] ask for these to be designed with editable fields so that franchisees can merely add in their name and contact details ~ it will save you money in the long run as you will not need individual branded documents to be produced and you will not then leave it to your franchisees to produce their own which can often have horrific results! 2014 Small Business Franchise Association 4
5 iii. iv. Protect your Brand Make sure that you have the legal protection for your brand/branding. Ensure that your systems and protocols are in place As franchising is about providing your franchisees with a whole business model you need to ensure that you have guidelines, systems and protocols in place for every avenue of your business. This includes the public facing elements as well as the admin/marketing and accounting sides of the business. Will you current systems stand the strain of having many people working within your business or do they need to be developed? C. What do I need to do next? Once you are ready to set out on your journey to Franchising the next steps are document preparation. You need to put together:~ Secure your brand legally. Check out the IPO office for UK businesses. Your Operations Manual [the ABC Guide for your franchisees of how to run a business under your brand]. Your Franchise Prospectus [a document providing an oversight into what your business offers] Your Business Opportunity Brochure [a document with more information about the business opportunity including figures etc, much more indepth than the previous document for people who are seriously interested in what you have to offer!] A Franchise Application Form [for interested franchisees to fill out] Your Franchise Agreement [this is a legal document and appropriate advice should always be secured from a lawyer about this document] A confidentiality agreement [that prospective franchisees sign when you go into more detail about your business and brand but prior to them signing a franchise agreement, ensure that you can protect your business model] Small Business Franchise Association 5
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