How to Franchise Your Small Business - Part One

1) Your Business Must Have Proven Success That Can Be Replicated

Before franchising, Subway had 16 stores with a healthy profit.  They reasoned that if 16 stores could be successful then 16,000 would be as well.

2) It Takes a Team

You need to have a strong team in place.  Each aspect of the operational structure of your franchise needs to be covered.  Someone should be accountable for the Product, Legal, Systems, Communications and Cash Flow.  You need an Org chart.

3) The Franchise Proto-type

How will you replicate your business experience in each location?  First you must have a defined, predictable experience.  You must develop your businesses “franchise proto-type” manual.  This includes your operations/policies-procedures manual as well as an accountability standard you will use to ensure the experience is predictable from product to décor to service to marketing.

The System

There is nothing more important in your business than creating a system that works and then sticking to that system. The system runs the business. People are secondary. They run the system. The system is clear-cut and clearly defined. The system takes all discretion, all opinion, and all argument out of the mix and therefore no decision can be made on a whim or made by somebody whose judgment is affected by a particular mood at the time. The system has been put in place because it works and therefore it only needs to be followed blindly by the people who run the system for your business to work. And you don't even have to be there to watch them do it! You are no longer your business and it will not disappear if you are not there. In fact the system can be - and should be - operated by people with the lowest level of skill (otherwise how could you have another 5000 businesses like it). They only have to follow procedure to achieve the consistent, predictable results which are entirely pleasing to everyone from your customers to your employees. 

The system is the solution to the problems that have beset all businesses since time immemorial! The free time that you've always wanted, that you listed as part of your Primary Aim will now be available to you.

Managers with little management experience, staff with ordinary skill levels, yet the business thrives on a major league basis because attention has been paid to every detail in the system so that the highest levels of discipline, standardization, order and cleanliness apply in a way which guarantees that customer expectations can be fulfilled in exactly the same way on every occasion. McDonalds' Franchise Prototype was a masterpiece creation and it set the lead for others to follow.

“When you start a business, develop it as if it is a franchise prototype: Systematize everything you do in your business, from how you answer the phone to how you handle customer complaints to how you market and sell your products and services. Document the processes by writing step-by-step sequential procedures.”  - Dick McCormick,  Biz Success Weblog

 

This creates across the company consistency.

 

It provides for shorter training times and allows you to cross-train more effectively.

It allows for a less skilled, less costly person to meet your objectives because the process just needs to be followed as laid out.

“Document your processes if you haven’t already. Put them in a procedure manual. BEGIN with your MOST important systems, those that most affect your customers, those that are the mostexpensive, those that are the most complicated and most likely tocause problems or confusion.

Once the system is documented and in place, you can go back and review the process to see if there is a better way of accomplishing the same thing. Periodically ask yourself if you are accomplishing what you want to accomplish. When you review the process, flow chart it. Evaluate the process and determine 1) If there is any step you can eliminate, 2) If you can develop a more effective sequence, 3) If you can physically position things (paperwork, materials, machines or …) for a better flow , 4) If you are duplicating anything in another process someplace.” – Dick McCormick – Biz Success Weblog

 4) Time to Shell Out the Bucks – Get a Franchise Attorney

Yep, sooner or later you are going to have to pay some legal fees.  You need the expert advice of an attorney, particularly one with franchising experience.  You are going to have prepare an assortment of legal documents including the Uniform Franchise Offering Circular to be viewed by potential franchisees and state and federal government entities.  If this guy cannot be your franchise consultant as well then you probably need to find one.

5) You’ve Got Some Convincing To Do

Now you must sell your idea.  It is time to find potential franchisees and present your sales pitch.  You also need to look over other franchise prospectuses and see how they went about the pitch.  You must also follow FTC rules in the creation of the prospectus.