We frequently meet with business owners who are considering expanding their business via the franchise model. Sometimes these are successful business owners who have developed two or three outlets and have independently arrived at the conclusion that further expansion would best be accomplished by franchising. Some of these people have come to us because they have read about the franchise concept on our website.
Other prospective clients come to us with a business idea or concept that has yet to be turned into reality, believing that they can simply launch a franchise system from scratch. We tell everyone we speak to the same thing: that franchising is an attractive method for developing a business concept, but that it first must be determined that the business can actually be run successfully and profitably and then it must be determined if the business model can be replicated. Can another individual be taught and trained to run the business using the same methods, systems and brand?
Putting myself in the position of a new business owner, I did what most people would do and went on Google and typed in “franchise my business.” The first page of the search revealed (i) a lengthy video ostensibly on how to franchise your business that was primarily an ad for a company that will supposedly help you do that; (ii) six links to other “franchise consultants” who provide “easy and affordable” secrets and tips and advice on how “you can take your business national immediately.” Then there were several links to articles in various publications in how to franchise your business. Most of these articles were a few paragraphs that concluded wit the caveat that “you should talk to a franchise expert before taking any such steps.”
So where does that leave me, the still uninformed yet hopeful business owner? I am a bit biased, but in all honesty, I would talk to a lawyer with experience in the franchise field. Franchising is a highly regulated field. To offer the sale of franchises of your business model, you must comply with federal and state disclosure and registration requirements that mandate the creation of a franchise disclosure document (“FDD”). The creation of this document by you with an experienced attorney will result in the organization of the information and material you will present to the public. You may decide along the way to enlist the assistance of business consultants: to help you create a business plan, write an operations manual, organize sales or any number of aspects of the process. Your lawyer can help you consider those options. But you will need to comply with the law, so legal advice is a good place to start. We have been active in the franchise space for many years and we can tell you that there are many good lawyers who can help you, depending upon where you are located. Find someone who has recently launched a system and ask who they worked with. Do not limit your searches to Google. Call your local bar association.Talk to more than one and go with the one who seems the most interested in you and your ideas.