Reading Time: 2 minutesThere is an ever-increasing tendency to franchise businesses and many benefits stand behind the popularity of this process.
First, it is the easiest way to set up more locations while saving corporate money and using franchisee funds. Second, it is an opportunity to cope with a capital shortage as your investments into franchisees are less than what you are paid back afterwards. And finally, you can expand your brand globally, resting assured that the quality of your products or services remains high.
When you are ready to go this way, ask yourself, “What is a franchisor’s transition process?” and find out how to become one below.
Who is a franchisor?
A franchisor is a business owner who allows a third party known as a franchisee to work under this business’s trade name. Adhering to the mutual agreement, franchisees make a profit out of the existing brand. They take responsibility for their companies. As they expect to generate substantial income, it’s in their best interest to work diligently, contributing to their own and franchisor’s business growth.
The franchisor, in his or her turn, should provide different sorts of support, including marketing, training for employees, financial assistance, ongoing product and service improvement. Once you understand the franchisor definition, you need to establish a strategy to make your business scale up.
A step-by-step guide to franchising your business
Whether you see untapped business opportunities or not, franchising can skyrocket your market share. Besides, the best thing about establishing a franchise business is that there is no need to reinvent the wheel. The formula of how to become a franchisor is brought out and time-tested. So, if all your doubts are left behind, follow these steps:
- Analyse your strengths and weaknesses. Think of the benefits your products and services have to make them even more competitive in the niche. Never turn a blind eye to their drawbacks that can get in the way of successful franchising, though.
- Secure your assets. From the very beginning, you have to document everything to protect your brand. Start with your intellectual property by registering your patents, trademark and logo. Next, set pricing and prepare a franchise agreement.
- Surround yourself with top-class experts. It is of paramount importance to have professionals who can walk you through the franchising process as you may not know all the hidden hazards. You can turn to a consulting firm for help or hire specialists yourself.
- Create a comprehensive set of rules. Keeping the highest standards across the network is every business owner’s mission. Therefore, employee training programmes and organisational regulations should be established to ensure compliance on the part of your franchisees.
- Take care of promotion. After having your franchise registered, work on a marketing, advertising and sales approach to make your business network coveted among potential partners.
- Run franchisee screening. It is not that difficult to find those who are ready to heavily invest to get franchise opportunities. It is not what you need, though. Since you want to popularise your brand and increase income, you have to work with professionals who will represent your trademark adequately.
By and large, for those who run businesses that can be replicated, franchising is a perfect way to go global at a fast clip. If you are a dab hand at what you do, and the franchisor definition is clear for you, be sure to develop your brand and pump up your income stream using this business model!