GlobalBX

Creating the Franchise Concept
The wily entrepreneur will always express a desire to start a business and make lots of money.  While there are no guarantees, it is difficult to succeed if you don’t even try.  One of the ways to leave a lasting impression on the world of business is to start a company, watch it grow and profit over the years, and then take the next step—turn it into a franchise operation that allows others to benefit from your proven system.  You will multiply your earnings many times over thanks to the upfront fees you receive from new franchisees, plus from ongoing royalty payments.  You will also see your brand spread out across the countryside, perhaps even becoming a household word.  After all, there was no McDonald’s chain prior to Ray Kroc, nor a Dunkin’ Donuts until Bill Rosenberg dipped his first lump of dough into a vat of fry oil.

Good Legal Advice Is a Top Priority
When turning an existing business into a franchise opportunity, the best place to start is to engage a competent attorney—one who knows the franchise industry and is familiar with various state and federal requirements regarding disclosure and other touchy issues.  Before you ever solicit your first franchisee, you will need a comprehensive package of material that conforms to specific government regulations.  The Uniform Franchise Offering Circular (UFOC) is a legal requirement as mandated by the U.S. Federal Trade Commission.  This document consists of 23 sections that discuss such elements as the names and business experience of the corporation’s key employees (officers), a description of any patents, trademarks and copyrights that franchisees are entitled to use, the corporation’s financial statements, and any litigation involving the parent company or existing franchisees.  Hiring an attorney who is skilled in this area will ensure that you stay on the right side of the law.

Keeping the Books Straight
To start a franchise, you will need a CPA or similarly accredited accountant to prepare an audited financial statement of the corporation.  Some owners choose to create an entirely separate business entity that looks after the franchising part of the business.  This is probably a good idea, as it differentiates the business you do at your original location from any revenue earned by selling franchises.

Create a Reproducible System
While you turned your fledgling business into a successful operation, one would hope that you kept track of all the things that worked, and also noted those that did not work.  When starting a franchise business, these are the details that form the core of the training program that will teach your franchisees how to duplicate your success.  It will pay you great dividends to hire a professional writer to take your notes and create a formal set of documents that make sense to any prospective franchisee.  One way to ensure success is to be surrounded by successful people.  Only the most energetic owner can start a franchise business on his or her own.  There are lots of former corporate executives out there, with plenty of entrepreneurial experience to share and the hunger to get in on the ground floor of a great opportunity.  Many will forego a hefty salary in exchange for a percentage of the resulting business, so long as they believe it has a chance to flourish.  One strategy to capture the interest of this type of potential partner involves engaging the services of a headhunter (corporate recruiter), particularly one who specializes in working with CEOs and other top executives.

Closing the Deal
If you want to know how to start a franchise, perhaps the best place to look is…at another franchise.  Although it’s not a good idea to plagiarize someone else’s work—and it may well be illegal—examining UFOC material from other franchise businesses in your target industry is a worthwhile endeavor.  Once all your legal work is completed, it’s time to put the word out and start selling franchises.  One way to do this is by joining the International Franchise Association.  Another may involve relationships with local business organizations and statewide or national trade organizations.  Anyone who is interested in buying a franchise in your field will likely use those resources to dredge up a list of likely franchising opportunities.

Looking At the Bottom Line
The cost to start a franchise will depend upon numerous factors, such as the business you’re in, the amount of exposure you hope to achieve, and the quality of the people you hire to help bring the concept to fruition.  Some advisors in the franchising industry suggest that it takes a minimum of half a million to one million dollars to get the operation off the ground.  Additionally, don’t expect to see that first franchisee hand over a check for at least two or three years; in some situations, it may take as many as five years to start a franchise.  The wise entrepreneur weighs all the options before taking the plunge.

Looking to buy a franchise? We have 100s of Franchises For Sale and Business Opportunities. Check out our Franchise Opportunities and get FREE franchise information today!