Franchising is a process of conducting business by replicating a firm’s existing business model. The franchisor permits the franchisee to use his trade name and strategies to do business in another location usually with the former’s guidance for a fee. This helps the franchisor expand his brand reach and gain money without working for it. Franchisees also benefit from this for it gives them a business to operate using tried and tested strategies.
If you have started a successful business and you’re thinking of going into franchising, here’s what you have to do:
1. Research about franchising.
Franchising isn’t easy as a walk in the park. Find out if it is beneficial for your company to venture into franchising. Your business should be sustainable and adaptable to ensure franchising success. You also need to read about franchising trends and news for you to know how you should manage your franchise.
2. Search for potential franchisees.
Look for those who would like to put up a franchise of your business. Usually friends and relatives, when they see how successful you have become, want to open a business just like yours. Give them a franchise opportunity. Talk about how they will benefit from it. Just make sure your potential franchisee has enough business experience and budget to manage a franchise.
3. Make a franchise agreement.
Specify how long the franchise agreement will last, the terms for renewal, the grounds for termination, the different fees (royalties, franchise fees, etc.) the franchisee will pay, what part of the profit will go to the franchisor and other details. When the franchisor and franchisee have come to terms, they will sign a contract. This is the beginning of the franchise operations.
4. Guide the franchisee.
Train the franchisee and teach him how to operate the business as well as you do. Help the franchisee manage business operations for at least three months and supervise his performance. If he does well, you can let him have full control of the franchise. As he is carrying the name of your business, it is important to maintain a uniform brand image.
5. Ask periodic reports from the franchisee.
To check the franchise’s performance, ask them to send weekly or monthly reports. Also visit the franchise often to see if it is doing well.
For others who want to be the franchisee, these are the things you have to do to get started:
1. Know your budget
Franchising usually requires a huge capital especially if you are considering those of big companies. Franchising fees can range from 20,000 to 500,000 pesos excluding royalties and other expenses. Don’t worry though; it will be worth the investment.
2. Look for companies that are open to franchising.
Evaluate different franchisors and see if they offer a sustainable franchise opportunity. Also consider if the franchise suits your interests for you have to enjoy what you do. Compare different franchises to see what appeals to you. Lastly, check if the franchise is legitimate as many people have fallen into franchising scams.
3. Sign a franchise agreement.
Read the contract first before signing it to avoid misunderstandings. Try to bargain with the franchisor if there are some fees that you think are too high. Sign the contract after you have reviewed it multiple times.
franchise business
4. Operate the franchise.
A good franchisor will help you manage the business during the first three months so you can learn the various strategies and tactics of business operations. Listen to him as he will guide you to success. After that, you’ll be left on your own to handle the franchise.
5. Give the franchisor periodic reports.
The franchisor has the right to know what’s going on in your business so send him weekly or monthly reports showing how well the franchise is doing.
source: http://www.articles.88db.com.ph/how-to-start-a-franchise
Franchising business is a booming in the market.Starting up your own franchise business can be an excellent way to reach your dream business where in you are having the security of a tried and tested true business model for success.
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