Franchising the Next Step in Profiting from a Prosperous Business


Franchising the Next Step in Profiting from a Prosperous Business


Franchising seems simple from the outside. Business owners will let another person use their business practices, products and logo to expand the reach of the business. It involves extensive time in preparation and then finding companies or individuals, who desire opening a business based off your business’s model. The following five steps are a general outline to franchising a business. That said, business owners should seek additional help in the form of a franchise lawyer and even, a potential mentor.

1) Success

Success of some sort is essential before a business owners start thinking about franchising. It’s the foundation on which the franchiser lures in franchisees. A business with something unique also has a higher chance of being a successful franchise; It is, however, not a requirement.

2) Preparation

Determine what the franchisee will get from the business is crucial. The franchiser should determine what he or she can provide the franchisee before moving forward in the process. A franchise lawyer would be able to assist. Items up for consideration include branding, products, training an

3) Legalities

Franchises are largely legal. They are primarily bound by two agreements. The first is the disclosure agreement(FDD) and the second is the Franchise agreement. Both agreements are necessary for a franchise.

Disclosure Agreement (FDD)

A potential franchisee will want to look at what they are getting from a franchise. Thus, a disclosure agreement must be signed. A disclosure agreement (FDD), according to the international Franchise Association, is ” designed to give [individuals] some of the information [they] need in order to make an informed decision about investing in a particular franchise.”

The Franchise Agreement

The Franchise agreement lays out the terms of the franchise. It may include the franchise system, trademarks, product, rights and obligations of each party, franchise length, payment requirements, termination rights, training, assistance and advertising requirements for both parties.

4) Finding franchisees

Advertising the franchise through online marketing and other avenues are essential for successful franchising. Franchisees will be looking into business and whether the franchise is a good investment. That’s why businesses need both a disclosure agreement and franchise agreement. It protects both parties.

5) Fulfilling the Obligations of the Franchise

Once the franchisee signs on the dotted line, the franchiser must complete the obligations laid out in the franchise agreement.

Franchises can be a logical next step for business owners. The legal dynamics of franchising requires the assistance of a franchise lawyer; Business owners can really bind themselves into a sticky mess, if they are not careful. That shouldn’t stop a successful business owner from creating a franchise. Success isn’t always guaranteed, but franchising is often worth the risk.


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