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Franchise Your Business

How to Franchise Your Business

If you are here, it is because you have built a business that you are proud of and after a number of years (sometimes months and sometimes decades) of hard work, dedication and a lot of learning - especially from your mistakes - you are evaluating the next step in the evolution and growth of your business. Whether motivated by a desire to build an enduring business for your family or a business model that is flat out in demand and requires growth, franchising represents a business expansion model that requires evaluation. In its purest form franchising allows successful business owners to take the assets that they have already built, to systematize them and to then establish a platform for multi-unit expansion. When done right, franchising your business represents a "win-win": you leverage the assets that your have already built and achieve the brand and revenue growth that you are looking for and franchisees tap into the business model, brand and systems that you have already built.

So how do you get started?

Well, below we have included some detailed information about franchising, including "what franchising is all about", "what are the primary steps to franchising" and "how to franchise your business". Also below, you will find a note from Charles N. Internicola, Esq. a national franchise lawyer who is also the managing member of a small but national franchise system. On this page (to the right) you can download and order our completely complimentary books and publications about how to franchise your business, including audio CD's where others like you share their experiences about franchising.

Message from attorney Charles N. Internicola

What I've learned as a Lawyer and Franchisor

Growing your business. If you are thinking about "franchising your business" I am sure that you have a good number of questions and - like I did (yes, I am also a franchisor) - you are probably experiencing some strong emotions and thoughts about your business, your goals, how far your business has come (and still needs to go) and whether or not you can take your business to the next level of success...

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Like myself and many others, this "next level" of business development and success requires a business that is adapted to work for you (as opposed to you serving the business) and one that - with your guidance - recruits the capital and efforts of others (franchisees who want to start a business but don't have your experience and know-how) to assist you in the continued (but controlled) development and expansion of your business and brand.

So Where Does Franchising Come In? Well, if you are like me and many other successful franchisors, franchising will enable you to "monetize and leverage" the assets that you have already build (your tradename, business systems, know-how, products and services) and put these assets to work for you by creating a system that your franchisees will pay (an initial "franchise fee" followed by continuing weekly or monthly "royalties") to duplicate. If done correctly, franchising represents a true win-win solution. That is, as a franchisor, your business becomes much bigger than you and the limited capital and man hours - no matter how hard you work - that you can devote to the day-to-day operations of your business. In turn, franchisees are granted access to a proven business that is backed up by your experience and the business assets and systems that you have developed and will continue to expand and improve.

So, How Can Franchised Expansion be Achieved for You? After many years (over 18) as a franchise lawyer and, now a franchisor myself, I have seen far too many successful business owners and businesses that never succeed in achieving their franchise goals and, more often than not, the reason for this "failure" is that they never launch. That, is far too long franchising has been either misunderstood or out of reach. My solution to this "failure to launch" is the 7 Step Franchise Launch Program that is designed to assist small but successful business owners in successfully establishing and launching a franchise system built for growth.

Learn more about what it takes. Below learn more about the 7 Steps to Franchising Your Business and order complimentary and absolutely no obligation copies of (a) my book "The Franchise Formula: A Guide to Franchising Your Business", (b) The Franchisor Interview Series Audio CD". Also learn about our 90 Day Franchise Launch Program.

Good Luck!

Charles N. Internicola, Esq.

It’s important to understand that franchising is not right for most businesses. However, for the right business - a business with well defined systems, trademarks, and a successful product or service - franchising represents a substantial vehicle for achieving multi-unit brands and business expansion.

In order to learn whether franchising can take your business to the next level, The Internicola Law Firm, P.C. has provided the following information to help you get started. Let’s review some of the basics:

What Is Franchising?

At its most basic level, franchising is a business model and expansion tool designed to facilitate business growth and development. This growth is typically achieved in the form of the multi-unit expansion of a successful business, and is grounded in the coordinated and combined efforts of both franchisor and franchisee. That is, the franchisor contributes his or her proven business model, systems, trademarks, and know-how, while each franchisee contributes the capital, labor, and managerial commitment necessary for multi-unit expansion. When executed properly, franchising represents a win-win for franchisor and franchisee alike.

This video is Part I of a multi-part series about "How to Franchise Your Business". If you are a successful entrepreneur with business systems and a proven business model, franchising represents one of the potential business expansion options that you should be evaluating. Franchising is not right for everyone and some businesses are not ready to franchise, so getting information about franchising is the first and most critical step.

What Does It Mean to Franchise Your Business?

When you franchise your business, you are taking your existing business and establishing the framework by which you will license and grant third party franchisees the legal right to adopt your business model, utilize your trademarks along with your proprietary products/services, and benefit from the systems and procedures that have made your business successful.

What Are the Primary Steps in Franchising Your Business?

There are many steps and stages in the franchising process; however, the most basic steps involve both legal and business requirements that must be satisfied. These basic requirements include:

1. The Franchise Assessment - Does Your Business Have What It Takes?

Having a successful business is not enough. As a business expansion model, franchising is not right for every business and it is not right for every business owner. When making this self-assessment, some of the many factors that you should consider include:

  • Does Your Business Have a Successful Track Record? - Franchising should be viewed as an evolutionary step in the expansion of your business. It should only come about after you have established your business and have obtained a level of measurable and sustainable success. That is, your business must have a track record of success.
  • Will Your Business Model Be Profitable for Franchisees? - Just because the business is profitable for you does not necessarily mean that it will be profitable for franchisees. So, when making your franchise assessment, determine how the franchise model will influence franchisee profits. Consider that on top of your existing cost structures, franchisees will have expenses in the form of royalties and other fees that they will be required to pay to you as the franchisor. Consider these additional expenses, evaluate cost savings and benefits that you may add to their operations as a franchisor (i.e., discounted proprietary products purchased in bulk, etc…) and evaluate the overall impact on franchisee profitability.
  • Can Your Business Be Taught to Franchisees? - Always consider that prospective franchisees do not possess the skill level and experience that you have - especially when it comes to operating the business that you created. To successfully franchise your business, you must ensure that you have developed business systems, procedures, and methods of operation that may be successfully taught to and followed by franchisees in their day-to-day business operations. Franchising favors franchisee operations that are not complex and that are broken down into clear and identifiable systems.
  • Does Your Business Possess a Unique Selling Point? - As a franchisor, the primary motivation and purpose in establishing a franchise system should be to expand your business and the unique products, services and/or systems that you bring to the marketplace. To create a win-win scenario as a franchisor, you must offer your franchisee a business opportunity and competitive advantage that they could not otherwise obtain if they just started their own business. These unique factors include recognized trade name, proprietary products, proprietary services, marketing plans, operating procedures, and successful business systems.

To learn more about how to franchise your business, get a free complimentary copy of "How to Expand and Grow Your Business Through Franchising".

2. Legal Compliance - Preparation of Your FDD.

Franchising is an extensively regulated industry. To franchise your business, one of the primary tasks that you must satisfy relates to compliance with both federal and state franchise regulation.

Every state is different, but at the core of all franchise regulation is the requirement that, prior to offering or selling a franchise, the franchisor must prepare a Franchise Disclosure Document (FDD) and deliver same to the prospective franchisee. The FDD contains detailed disclosures and sections (known as Items) designated by the Federal Trade Commission that focus on providing prospective franchisees with information about the franchisor, the franchise opportunity, legal obligations and rights between franchisor and franchisee, and investment estimates and expenses.

Let Us Help You Franchise Your Business

As a start-up franchisor, planning and preparing your FDD should be at the top of your must-do list to franchise your business. The FDD is a legal document that must combine and satisfy multiple federal and state regulatory requirements; therefore, it is critical that this document be prepared by an experienced franchise lawyer.

When it comes to franchising your business, you will need to understand and navigate a complex process. With The Internicola Law Firm, P.C. on your side, you will have the insight and guidance you need at every step in the process. Contact us to begin assessing your business and planning a franchise system that is built for long-term success.

Questions About State Specific Franchising Laws?

Click here to learn more about the status of franchise registration and franchising your business in each state.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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