Monday, October 10, 2011

FRANCHISE BUSINESS TIPS | Franchise Business

Article by Su Yu Jin

FRANCHISE BUSINESS TIPSFranchising a business has several advantages such as risk reduction, retention of capital, and a higher return on your investments. Franchisees find it a viable business since they are purchasing an established brand name or trademark, making it easier to do business than when they start a new company, which only gets established slowly.

STEPS INVOLVED IN FRANCHISING A BUSINESS

When considering whether to franchise your business make sure that there is sufficient demand for your product or services and that the concept is adoptable anywhere. Franchisees must be able to earn a profit after paying the fees and royalties. The franchisees must find your business unique and yet credible. You must consider registering your intellectual property to protect your business adequately. The franchise must be reasonably priced, have programs to provide training, and guidance for your franchisees to conduct business the way you do it.

Once you have decided to franchise, the next step is to market your idea. You can register at franchise brokerage firms or use trade shows to make people aware that you are ready to franchise. Develop a sales campaign with franchise sales brochures, videotapes, and a website with franchising information.

Register your trademark in all the states that you do business. Hire a good attorney to guide you through the legal aspects involved in franchising a business.

Have a clear perception of your system, procedures and advertising methods. This helps you know what kind of location and what kind of franchisees would be suitable for your business.

It is essential to develop specific systems for all aspects of the business including site selection, lease negotiation, training, hiring and firing of employees, unit operations, advertising, and financial management. All the steps involved in each area of the business must be recorded in order to train the franchisees. Be certain that the franchisee is familiar with all aspects of the business. The franchisees must strictly adhere to the system.

Develop the Uniform Franchise Offering Circular or UFOC, which must be presented to the franchisee at the first personal meeting or at least 7 days prior to the signing of the contract. This document provides the history of the company, financial statements for the last 3 years, list of existing franchisees, litigation history, and the franchise agreement. Provide constant training and support to the franchisees, offer rewards as incentives, and be certain they maintain the quality of your products by constantly monitoring and inspecting. These are a few steps you need to know when considering how to franchise your business.



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