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You’ve poured money, energy, and even tears into your small business. And now, you’re ready to take your business to a whole new level by franchising your business.
Good thinking. After all, research shows that the success rate for franchises is about 90% compared with just 15% for independently owned startups.
If you’re thinking that your small business would make the perfect franchise, here’s a rundown on how to franchise a business in four simple steps.
Let’s get started
1. How to Franchise a Business? First, Create Your Disclosure Document
For those interested in creating business franchises, such as a restaurant or estate sale franchises, preparing multi-state franchise disclosure documents (FDDs) is a critical first step.
With an FDD, you’ll be able to sell individual-unit and multi-unit franchises in any state across the United States.
2. Create Your Operations Manual
Your next step in franchising a business is to develop your own operations manual for your franchisees. The confidential manual should explain everything that a franchisee will need to operate their business.
For instance, you can include closing and opening checklists, training information, and recipes in your manual. Keep in mind that you will need to continue to update this document as well.
3. Register Your Trademark, and Establish a New Entity
Be sure to also register your logo’s design and words with the office responsible for patents and trademarks in the United States. Furthermore, you’ll need to create a fresh franchise entity, such as a limited liability company.
In addition, you should open a brand-new bank account to use for your new business. This will enable your accountant to prepare your opening balance sheet, which is required for your FDD.
Another critical step in the franchising process is to register the FDD for your business in states that require this. These states include the following:
- California
- Wisconsin
- Hawaii
- Washington
- Illinois
- Virginia
- Indiana
- Rhode Island
- Maryland
- North Dakota
- Michigan
- New York
- Minnesota
Specific franchise filing states also require you to register the FDD with them before you can start selling in their states. These states include the following:
- Utah
- South Dakota
- Nebraska
- Texas
- Kentucky
- Maine
- Connecticut
- South Carolina
- North Carolina
- Florida
The remaining states do not have the above FDD registration requirements.
4. Develop a Sales Strategy and Plan
Finally, determine where you would like to open your franchises. For instance, you could expand locally, or you could target areas in other states where consumers may be interested in your particular brand.
Also, create a plan for how you will excel in the next one to five years. Enlisting the help of an honest business mentor can help you to achieve this with confidence.
How We Can Help
In addition to showing how to franchise a business, we offer a wide range of other business-related tips and advice.
For instance, our site discusses the benefits of inclusive leadership in the business setting. In addition, you can learn about how technological advancements have transformed the real estate industry.
Our site also highlights how to create your own business website.
Take a peek at our site to learn more about how to expand your business and keep it flourishing in the months and years ahead.
