Franchise development is the legal and business planning process and steps required to franchise a business and turn a small or local business into a regional or national franchise system. Franchise development is driven by legal processes and steps that require compliance with franchise laws and the preparation of a franchise disclosure document by a lawyer. Franchise development companies and developers are individuals and businesses that offer assistance with the franchising process, including preparation of operations manuals, planning, and franchise sales strategy. There is no certification or accreditation as to what and who may qualify as a franchise development company or franchise developer.
What is Franchise Development?
Franchise development is the legal and business planning process of franchising a business. The primary milestones and steps involved in franchising a business and, thereby, the franchise development process, include:
- Franchise Assessment - determining if franchising is right for you and if your business is ready.
- FDD Preparation - preparing and issuing your franchise disclosure document.
- Operations Manual Development - developing your franchise operations manual.
- Trademark Registration - evaluating and registering your trademarks.
- Forming Your Franchise Company - forming a new franchising corporate entity.
- FDD Registration - Registering your FDD with the franchise registration states.
- Setting Franchise Sales Strategy and Budget focused on a 5 year growth plan.
What are Franchise Development Companies and Franchise Developers?
Franchise development companies are businesses that provide assistance with the franchise development process. Franchise developers, sometimes also called franchise consultants, are individuals that assist with the franchising process and work for a franchise development company. There is no special certification, accrediation, training, or education process that is required for someone to call himself or herself a franchise developer or franchise development company.
Franchise Development tasks that competent and qualified franchise developers can assist with, include:
- Assessing if you are ready for franchising
- Advising on franchise growth strategy
- Preparing operations manuals
- Setting a sales strategy
- Helping you build Industry relationships
Remember, franchising your business is not an end-point or goal but, rather, is a stepping-stone for building a successful franchise system. Learn more about why you should approach franchising as a franchising as a step-by-step process.
Be Cautious When Evaluating Franchise Developers
Be cautious of franchise developers and franchise development companies that solicit you, claim to offer a complete package of franchising services that includes the legal preparation of your FDD, or make franchise sales sound easy. Franchise developers are not franchise lawyers and they should not be preparing your FDD or claiming that your FDD will be reviewed by their legal counsel. Important points to consider:
- Your FDD is Legal Document that Should be Prepared by Your Franchise Lawyer - The FDD and your franchise agreement are legal and regulatory documents that will form the foundation of your franchise system. If a franchise developer claims that they will prepare your FDD and have it reviewed by their in-house lawyers or that you can hire a lawyer to review their work, something is wrong. An in-house lawyer works for the developer and not you. You need to work directly with your own lawyer who is accountable to you and where you will benefit from privileged communications afforded to the attorney-client relationship. Years from now if a legal issue arises will a franchise developer care and offer assistance or will they tell you its a legal issue and refer you to a lawyer?
- Avoid Document Mills and Packaging Shops - Avoid developers that claim to do everything in one fixed fee package, including the legal development of your FDD. What they are really doing is offering you everything, including legal advice (by non-lawyers), FDD, Operations Manual, Planning, Website, etc... but, in the end delivering nothing of substance. Just low quality documents, marketing copy, and generic sales strategy that, in time, leads to missteps and frustration.
- Dont' Assume that Everyone Listed on a Developer's Website Works for the Developer - Recognizing the critical importance of having a franchise lawyer prepare your FDD, some developers display on their website claimed team members and advisors who are really not a part of the franchise developers team. They do this to mask the size and core competency of their actual team. This happens often where developers will list on their own website independent franchise lawyers that are not employed with or directly affiliated with the franchise developer.
Learn more about Franchise Development Company warning signs.
Are Franchise Developers Replacements for Franchise Lawyers?
No. Franchise developers are not replacements for franchise lawyers. The franchise development process is driven by core legal steps that require compliance with federal and state franchise laws and that require the development of legal documents including, your franchise disclosure document and franchise agreements. Franchise developers cannot and should not be preparing your FDD, registering your trademarks, registering your FDD, or advising as to legal structure.
We Can Help with Your Franchise Development
Our firm works with hundreds of franchise brands and in addition to our legal services, our team includes franchise development experts. Throughout the franchise development process we assist with:
- Franchise assessment and strategy
- Strategic planning from best practices royalty structures through territory development and financials
- Legal development and preparation of your FDD and franchise agreements
- Formation of your franchise company
- Protection of your trademarks
- Understanding franchise growth strategy and processes
- Brand development
- Aligning your goals with the future growth of your business as a franchise
- Plus so much more!
Together, we'll be on a journey to help you Win at Franchising!