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Franchising 101, the place you start for franchising
Welcome to 123franchising.net
Consider this franchising 101! It is run by the folks from the premier franchise development, funding, and franchise sales organization Franchise Beacon. We keep www.franchisebeacon.com specific to its three clusters: startup, sales, and development as services. This site is for everything else.
As this site develops, we will talk about the basics of franchising, from a franchisee and franchisor standpoint, in small, chewable bites. You won’t find any deep dive articles, Ultimate Guides, or long-form content here. Just short articles and videos that explain one small piece of the franchise puzzle, along with resources to dig in deeper. If you are considering franchising your business, you should start with our 5 questions to ask before you franchise, then Am I ready to Franchise?, and finally The Ten Steps from Business to Franchisor.
As a franchisee, a good place to start is the Top Ten Guerrilla Marketing Tactics For Retailers, because nothing is more important than driving customer engagement!
Finally, be sure to check out our franchise resources page. This will get you pointed in the right direction for how-to’s, books, organizations, etc. Thanks for stopping by!
The Resources Page
Resources for franchisors and franchisees
This page is not exhaustive, and we will continue to add to it. If there is a name or a company on this page, it means I, Michael Peterson, have personally worked with the company and was satisfied with the results that I received. I can’t promise you what your experience will be, but I can promise that no one or company on this list paid to be here.
Franchisor Education
IFPG
The International Franchise Professionals Group is both a broker’s network and an educational resource. I volunteer my time for training emerging franchisor brands, and the site and company are a fantastic resource for franchisors.
IFA
Not much needs to be said about the IFA. They are the organization for franchisors and franchisees. Period.
The Franchise Research Institute
As a franchisor, if you want real, scientifically valid data about the performance of your franchise network, this is where you go. If you are considering buying a franchise, and they are a “World Class Franchisor”, you can count on the fact that the organization is strong and aligned with its franchisees.
Franchisee Education
AFA
The American Franchisee Association is the only organization I know of that is specifically set up for franchisees of disparate organizations to come together for their common good.
The Franchise King
Joel Libava, AKA the Franchise King, is a franchise specialist who offers consulting to prospective and existing franchisees through his Franchisee University and one-on-one coaching. This guy knows his stuff.
Franchise Interviews
Led by Dr. Martin McDermott, who is also a professor at Kaplan University, Franchise Interviews is one of the first websites that offered detailed interviews with some of the most informative sources on the topics of franchising and entrepreneurship.
Franchisor Funding
First, if you need to know how to fund a franchise, read the article on how to fund a franchised business.
Benetrends
Benetrends can help with 401K, SBA, and other start-up loans.
Franchise Start-up, Funding, and Sales
Franchise Beacon
If you are looking for the best-in-class for outsourced franchise development, franchise sales, and overall franchise consulting, the team at Franchise Beacon is unequaled. With a bench that includes the top franchise sales people in the country, multi-national franchisors, and large multi-unit operators, we have experience unlike anyone else in the franchise industry. Additionally, we have launched a funding arm to help franchisors and franchisees alike fund their working capital needs.
Olson and Associates
One of the first true franchise consultants, Steve Olson is a thought leader in the franchise industry, and can help guide young and mid-sized franchisors through the trials and tribulations of growth.
Online Lead Sources
If you do not have a solid franchise sales process, you should not be spending money on online lead portals! If you do, however, they can help you grow your franchise system quickly.
Franchise Gator
Franchise Gator produces high-quality leads for franchisors that are willing to put in the effort to work them. Unlike other portals, they don’t use bait and switch, or use a franchisor’s popularity to drive traffic when they are not sending leads to that franchisor.
Franchise Direct
Much like Gator, Franchise Direct is known for quality leads and honest practices.
Recommended Reading
How and Why to Franchise Your Business
This book was written with the would-be franchisor in mind. It delves deeply into such topics as preparing to become a franchisor, the legal repercussions of franchising, how to recruit the right candidates, and how to manage a franchise system. This book will guide you in building a successful team of experts to help you create the stellar franchise brand that you dream of!
Become a Franchise Owner!
The definitive A-to-Z guide to researching, selecting, and starting a viable franchise business.
Grow to Greatness
The Amazon #1 best-seller, Grow to Greatness is a must-read, essential guide on how to build a world-class franchise system faster.
More to come!
Remember, our site is young! This page will continue to grow. If you want to be included on this page, and we have worked together, please let me know.
The process
Ten Steps from Business to Franchisor
Determine if your business is one that can be franchised.
First you need to have a proven model, not just an idea. Preferably at least 2 locations operating profitably for at least a year each. Also, the business has to have broad appeal (an I Love New York t-shirt store is probably not a good fit for franchising), and the business shouldn’t require a hyperspecialized skill that only a handful of people have. This is often referred to as a feasibility study.
Make sure that you are fit and ready to be a franchisor.
You and your existing business have to be prepared for you to take a step back. You also have to have the funds lined up to spend between $150K–$350K, depending on the complexity of your business, from the time you start until the franchise is self-sustaining.
Build the right team.
Eventually you will need a support department, accounting team, training team, etc., but for now you need, at a minimum, an expert franchise sales person, someone with experience running the operations of a franchise, someone that can help you develop a training program, support program, and operations manual, and a franchise attorney. For many emerging franchisors, bringing on a franchise consulting company makes the most sense as you get everything except the attorney under one agreement, often for a fraction of the cost of in-house.
Start the documentation process.
Document every step of your business, from how to order products to suggested operating hours and target margins. This will later become your Operations Manual. Again, a good franchise consultant or Operations Consultant can help you with this.
Determine the nuances of your franchise offering.
How much control you require on your look and feel, what your involvement will be in the franchisee’s supply chain, the initial and ongoing fees you will offer, etc. This is the most complicated part of becoming a franchisor.
Determine your growth plan and strategy.
Do you want to start regional, and then go national, or hit the national (or even international) stage all at the same time? How many new owners can you support in a month?
Build a marketing plan and budget.
This will typically include franchise brokers, franchise portals, exhibitions, as well as organic and paid web traffic.
Design and understand your mutual evaluation process and what you need in a franchisee.
Seek legal guidance on what information you can share and when and seek business guidance on what kind of individual will most likely be a good fit for your organization.
Design your training, onboarding, and support processes.
These processes have to cover both proactive and reactive support and training that extends from franchise agreement signing through the end of the franchise relationship.
Execute.
Be careful that you award only the right franchisees in the right markets, and be willing to be flexible on your model and your offering as you go to market.
Am I ready to Franchise?
Ask if before you ask how
Before you start looking into “how to franchise my business” (which our good friends over at Franchise Beacon can answer for you), you have to realize that you might not be ready for that question yet. First, you need to make it through “should I franchise”, and part of that question is “am I ready to franchise now?”. You can start out with the 5 questions to ask before you franchise, but there is more than that to know if you are ready. The franchise industry is a very giving industry. People volunteer their time, publish articles and franchise sales guides, and most franchisors are more than willing to help you determine if this is a good fit for you. Before you make even one step towards franchising, I would strongly encourage you to:
- Attend at least 2 IFA events
- Interview or listen to the interviews of at least two franchisors
- Interview at least two franchise consulting firms
- Put together a 2 year pro-forma, and have it critiqued by an industry expert
If, after you have seen what a real franchise budget looks like, understand more of what an emerging franchisor does every day, and have your funding secured for both you and your franchisees, then you are ready to move on to the “how”.
How to franchise my businessHow to Franchise my Business
The Magic Question: How to Franchise My Business?
Is it time to franchise?
Are you the person who keeps googling “how to franchise my business”? Do you keep hitting articles that are too long, or too short, or just ask you to call? Well, let’s address it!
This is not an easy process, but it is simple. But there is so much information out there on how to franchise a business, where to start?
First, you should really consider seeking the advice of an expert franchise consultant who can help you through each step, and figure out what information is there to take your money, and what’s there to help you. They can help you sort through all the information and teach you how to franchise your business. Remember, there is a step by step process to franchising for you to follow!
- Determine if your business is one that can be franchised.
- Make sure that you are fit and ready to be a franchisor.
- Build the right team.
- Start the documentation process.
- Determine the nuances of your franchise offering.
- Determine your growth plan and strategy.
- Build a marketing plan and budget.
- Design your mutual evaluation process.
- Design your training, onboarding, and support processes.
- Execute.
Of course there is so much that goes into each one of those steps. Along the way you will need to:
- Strengthen or redesign your corporate brand and image
- Implement technology for both prospect and franchise management
- Do the legal work for trademarks both domestically and possibly internationally
- Decide on fee structures that both you and your franchisees can handle
- Create a franchise website
- Write operations manuals
- And so much more.
And that is why step 3 is so important.