How Long Does It Take to Franchise a Business?

Franchising a business is simple. Just file all the necessary paperwork, set your fee and royalty structure and then go sell the business model to eager entrepreneurs. The entire process can take a few short months. 

That's if your business model is perfectly in order and in demand. Truthfully, it can take years for a concept to validate its model in a crowded industry. But in an industry without an established franchise player, the process can move quickly. 

“Once you get all the documents ready, you’re ready to franchise,” said Adam Goldman, a franchise consultant at franchisecoach.net. “But still, I’m not sure you’re actually ready. You need to get development people and support staff. In my opinion, the minimum time it would take goes from six months to a year. For most business models to make sense, you’ll need three to five years of numbers and profitability for anyone to take you seriously.”

And therein lies the problem. Anyone can franchise a business and sell units. To actually succeed at building a franchise empire, a business needs to generate enough competence, knowledge and support staff to support the effort.

But business is built on confident entrepreneurs taking and managing risks, and according to Mark Siebert, an esteemed author and the founder of iFranchise Group, sometimes an aggressive approach works best. 

“Assuming you have a good business model to start, you should be able to franchise in about four months in a non-registration state. Registration states take a little longer, but you could be franchising in seven months,” Siebert said. 

Why would a company franchise so quickly? To dominate the market. 

“When we started working with Massage Envy, they had been open for three months and were planning to open their second location,” said Seibert. “The first store was about at break-even and trending very positively. It’s a membership-based business, so you knew based on the numbers they’d be profitable within the month and highly profitable within six.”

Today, Massage Envy has more than 1,150 units. According to Siebert, this was a case where rushing to market made sense. 

“If they had been wrong, they would have spent a bunch of money on five pounds of paper that are worthless,” he said of the franchising documents. “Sometimes, a franchisor or business owner will take a risk because they want to get to market sooner rather than later. If you’re going head-to-head with McDonald’s, you’d better be pretty slick. There’s tons of competition. Massage Envy saw it had no competitors, so it went ahead.”

Every potential franchisor has to decide on the level of risk and competition they’re comfortable with before taking the plunge into becoming a franchised business. But like all business decisions, the answer will always come down to the bottom line. 

“Ultimately the question of if your franchise is franchisable is if you can sell it,” said Siebert. “Does it have a sizzle factor? Do you have the personal or business credibility? Can you replicate the business, and what kind of return on investment are you talking about?” 

According to Siebert, a franchise investment should outperform the stock market. After all, someone with $100,000 to invest in a franchise could just as easily get a safe corporate job and invest the money in the stock market for a 10% annualized return. 

“You have to beat the stock market. I’d say you have to get to at least 15% ROI after royalties. If it’s 20% or more, you can go after multi-unit developers,” he said. 

In the end, the relevant question might not be “how fast” a business can franchise, but at what level of confidence and profitability it can be franchised.