Don't Forget These 5 Things When Launching Your Brand's Franchise Opportunity

The rates are consistent year over year: 20 percent of small businesses fail in their first year, and 50 percent of small businesses fail in their fifth year, according to the Bureau of Labor Statistics’ Business Employment Dynamics. Once a franchisor has established its proven business model and has a track record of success, the chances of failure will decrease, but careful planning and preparation is key for successfully setting up your franchise for success.

Before launching your franchise concept, you don’t want to forget these five things:

1.) Fully evaluate your franchise and business concept.

Before you embark on the journey of franchising your business, you’ll need to make sure you have thoroughly thought your concept through. A franchised business must be replicable, be able to provide good returns and be run by someone other than yourself or the original owner. Running your business for a year or more and in more than one location, will give you some ‘proof of concept.’ Once your launch, your life will change.

“Your role will change from that of business owner to franchisor. You will shift to supporting and selling franchise units instead of running your business. Franchisors must be comfortable switching roles and letting things go that they may have enjoyed about running their businesses prior to franchising,” said Marisa Allen, C.F.E and Franchise Consultant at The Franchise Concierge.

2.) Ensure all of your documentation is in order.

The Franchise Agreement and the Franchise Disclosure Document are the two main pieces of documentation you will need to have completed before your launch.

“Take a step back to make sure all of the key pieces are in place and hiring a reputable firm or individuals to help with the launch is always money well spent. New franchisors should not take the leap until all of the boxes have been ticked off for a smooth transition,” said Allen.

3.) Plan for unexpected costs.

As with any new business, unexpected costs are the one thing you can expect as an owner. According to Allen, it can take up to $100,000 to launch after all of the costs and you will want to hire a franchise attorney or consulting firm that is experienced in getting franchises started and ready for growth.

“Recruiting franchisees, marketing, supporting your franchisees will all cost more than you think. Early on, be prepared to spend more in order to get that momentum for your brand’s growth,” said Sean Fitzgerald, Chief Development Strategist at No Limit Agency*.

4.) Get your name out there.

Marketing is going to be a necessary cost to get potential franchisees and even consumers to learn about your brand. Use all of our outlets including trade shows as well as digital marketing since many people looking to buy a franchise business are starting their research online. When you a chance to speak with prospects, your message should be consistent.

Allen describes, “Have a solid process in place when speaking with clients. Make sure the person selling your brand is the right person. I have seen emerging brands with a great concept but the person selling has no clue about how to talk to someone who might be interested in their brand. Making key hires and having the right people in the right roles will also prove valuable to your success as a franchise.”

5.) Don’t forget about the long-term success of your franchise system.

Always thinking about the long-term success of your brand and stick to the plan of bringing on the right franchisees. Don’t take any shortcuts and ensure you are recruiting good, quality franchisees.

Fitzgerald explains, “Your first franchisees will be your partners for a long time and selling to the wrong ones in the beginning is probably the number one killer of franchise brands. Bad franchisees will under produce and be a cancer to other franchisees within the system and that will ruin your validation and your chance for growth. You’ll end up spending your time trying to satisfy franchisees instead of bringing on new ones and it will completely sabotage your system.”