Should You Create an Education and Training Business Instead of Franchising?
Have you ever been approached by other business owners in your industry and have been asked to train them so they can open up their own business? Or how you grew your brand and if you can help them do the same thing? The first thing that may come to mind is franchising. But, is there a way to monetize your skills and training ability if you aren’t ready to franchise?
Many times, successful business owners—usually in education-based or service-based industries—may not want to franchise their business or may not be ready to franchise, but get asked all the time if they can help train others in their industry and help them with their business. You may have a solo business or a limited team and may not want to franchise, but you see an opportunity.
So, instead of franchising, can you create an education-based and training business where you help other people in your industry (through webinars or one-on-one training), provide those individuals with training and education, and they pay you a fee? The answer is yes!
Franchising vs. Education-Based Business
Let’s go back to the basics. Under federal and state laws, what is and is not a franchise is broadly defined. A franchise relationship is created when you license your trademark, receive an upfront fee, and you have an agreement (written or oral) with control over how that individual uses your trademark and your training. Franchisees will use your brand, expand your brand recognition, and open up throughout the country. Ongoing, franchisees provide you with revenues in the form of royalties.
Reasons Why You May Not Be Ready to Franchise
The franchising model may not be for everyone. Or, you may not be ready to franchise just yet. Some reasons include limited capital or it may not fit into your lifestyle long term (Franchise Agreements usually are 5-10 year contracts).
Creating a Viable Education-Based Platform
There are instances where people are providing their training and receiving a fee. It gets complicated when they also want to use your brand name or trademark.
Once they use your trademark, you are giving them a license. (Remember, a franchise involves giving a license to your trademark). And it brings you a step closer to being considered a franchise. What brings you even closer is control (another step that creates a franchise relationship). That is, how they will be required to operate.
Can you Create an Accreditation or Certification Process that has your Branding or Logo on it?
Yes! But, here are some rules your “trainees” need to follow when using your logo:
- They can’t use your logo or trademark in the name of their business.
- They can’t market and promote your logo or trademark.
- They can acknowledge that they’ve been trained by you and obtained your accreditation.
Yes, franchising may not be right for you but that doesn’t mean you can’t monetize your skill and ability! The downside to not franchising is:
- You’ll be losing the economies of scale that you would get through franchising.
- You may be creating your future competitors.
- Your trainees will be creating their own brands and growing through your learning curve.
But if you’re not ready for franchising, this is a way to monetize your skillset, training ability.
Before You Do Any of This, Get Experienced Counsel
Before you take any steps, it’s important to consult with an experienced attorney. Many times licenses can fall into the category of an unintentional franchise. The information in this blog post is for general information only and you should consult with a lawyer before making any decisions.
By Charles Internicola May 19, 2021
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