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Start a Franchise Business
Many small-business owners reach a point where their company’s success makes them think of expansion.  One possible way to enjoy additional income involves opening a second location, and then adding more as time and cash allows.  But an increasingly popular method involves franchising your business.  The franchising process will allow you to earn significantly more in both fees and royalties than you could ever hope to make by running multiple locations on your own.

The Process of Franchising
Franchising opportunities are available no matter what kind of business you run – whether it involves retail or wholesale locations, a mobile operation, or even a work from home situation.  The question of how to start a franchise rests upon several basic elements, all of which must be present in order to be successful.

• Credibility – Your business must have a track record of success, and one that a potential franchisee can imagine participating in as well.
• Differentiation – There should be one or more elements that makes your business better than its competition; this could be a unique product, a stronger marketing campaign, lower business costs, or targeting a previously untapped demographic.
• Simplicity – The franchise system you devise should be easy to learn and implement.
• Adaptation – Your franchise concept must work well throughout a broad range of locations.
• Investment value – The business plan should show a healthy return for the owners, even after all royalties and other expenses are paid.

What is Franchising?
The process to begin franchising encompasses a number of important steps (see below), but franchising essentially provides a company’s owner with the ability to license brand awareness and business methods across broad geographic areas without having to run each operation personally.

The Boy Scouts Are Right – Be Prepared
Franchising info can be found all over the Web, but one of the smartest moves you can make involves talking to someone with experience in franchise law.  Franchising information is also available from a number of organizations devoted to franchising, notably the IFA (International Franchise Association).  The franchising cost will depend upon any number of factors, but you should be prepared to part with several tens of thousands of dollars to get the ball rolling – including legal fees, document preparation, marketing, and so on.   Most important of all – do your homework!

Five Steps to Take Before You Start a Franchise
Before you jump into the franchising fray, you will want to get your existing business fully in order.  Here are five steps to take before you take that giant leap: starting a franchise:

1. Build up your business so that it shows a consistent rate of return.  In order to justify charging prospective franchisees $50,000 or more to buy into your business model, you will need to prove that the franchise they buy will sustain a high level of profitability and ROI (return on investment).
2. Create efficiencies throughout your operation and document everything you do to achieve it.  An operations manual is an important element of any franchising package.  This material will form the Bible of your business; it shows a franchisee exactly what to do in any given situation in order to duplicate your success.  By keeping track of your own steps to profitability, you will be able to map out the proper path for all those who follow.
3. Expand your business first, before entering into the franchising process.  Opening a second location, once you have the first one doing well, offers an opportunity to test-drive the exact same process a franchisee would go through to start his or her own operation.
4. Surround yourself with hard-working individuals who will support you efforts and provide much-needed expertise to franchisees as they come aboard.  A franchising operation needs people with all sorts of skills – sales and marketing smarts, operational know-how, computer aptitude, and so on – that will serve you well when franchisees start lining up to buy your market solution.  And don’t be surprised if some of these teammates end up as early franchisees themselves.
5. Set aside plenty of cash to carry you through the process of franchising.  You will want to retain top-quality accountants, attorneys and marketing experts, all of whom will contribute to making a franchising opportunity your best possible move.

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