The payoffs to turning a business into a franchise include increasing awareness of your brand and scaling up on a regional, national or even international level. The prominence of franchises has grown as an increasing number of people realize the advantages ownership offers. There are over 900,000 franchise businesses across 300 business categories in the U.S. which provide nearly 18 million jobs and generate over $2.1 trillion to the economy.
In order to reap the benefits of franchise ownership, it is critical to address all of the necessary details across all aspects of your business now and for the future. You can create a strong foundation for success by keeping these 3 key things in mind when you start franchising your business.
1. Know the Legalities
Legal items may not be glamorous – in fact, they are often downright tedious – but they can make or break an aspiring franchisor. Not only could you end up mired in a lawsuit, people may decline to work with you if you have not ironed out legal complications.
It is best to work with an attorney or another expert when setting up any kind of business. Franchisees have access to the International Franchise Association (IFA), an excellent resource for legal issues. The IFA is a strong advocate of franchises – making aid and resources available, lobbying for legislation that will benefit franchises and providing a treasure trove of pertinent information.
2. Become Obsessed with Your Business
Paying careful attention to every detail is one of the steps to franchising your business. Ardently learn every nitty-gritty aspect of your business, even those that may seem minor at first glance. Remember, you will be leading a team of people who will look to you as the ultimate authority. You must become that ultimate authority or run the risk of losing the respect and trust of your franchisees.
Knowing your business inside and out will also help you create processes for franchisees to follow. They have not been at it for years, so they will welcome the guidance. Plus, joining an organization with procedures in place is one of the appeals of franchise ownership. The people joining yours will appreciate, and probably expect, structures to be in place.
Mentally put yourself through the paces as if you were one of your franchisees. Account for every piece of paperwork that needs to be filed, revisit the challenges of hiring and training staff and remember how challenging the lean times were. When you think like a new franchisee, you are better able to anticipate and solve their problems.
3. Strike a Healthy Balance
There is a fine line between being overly strict and losing control over your franchisees. On the one hand, you always want to enforce the most important rules, the rules that make a serious impact. On the other hand, you do not want to come across as rigid and unsupportive.
“Support” is a critical term when it comes to franchises. After all, many people decide to open a franchise because the support offered by the larger corporate structure makes them feel comfortable. Make sure you offer franchisees support in the form of marketing collateral, supply lists and clearly outlined procedures. These are just a few examples.
That said, you also want to make sure they know who is boss and that they respect the rules. While there are multiple locations within the corporate structure, a certain level of cohesiveness should be in place to tie it all together. This is part of building a strong brand and rounds out the steps to franchising your business.
Financing Designed for Business Growth
The franchise industry accounts for approximately 50% of all retail sales in the US. The opportunity to grow your business through franchising is ripe. And when you back the venture with solid financing, you position it for success.
At ICA, we do everything we can to make the lending process easier on you. Working with a national network of over 50 lenders, we ensure our franchise loan program meets our clients’ specific needs. We possess the experience to so successfully, as our leadership has specialized in small business funding for over 25 years.
Enjoy the following benefits when you choose ICA’s franchise financing program:
- Rates as low as 6%
- Fast pre-qualification process, closing and commitments
- Up to 25-year terms
- No prepayment penalties
- Extra cash for working capital
- Out-of-state borrowing
- Six-month interest-only grace period on new units and relocations