Working with an experienced franchise attorney is the best way for would-be franchisors to get practical and accurate information on business expansion. Entering the world of franchising offers several benefits, but the growth strategy also comes with many challenges — and new franchisors often make costly mistakes.
Before you consult with a franchise attorney, however, you have a few critical factors to consider.
Consider Your Skills
Building a franchise system is different from building a business. The skills that have led to your success as a small-business owner may not be sufficient for success as a franchisor. Assess your skill set, and if you lack proficiency in any area necessary for franchising, think about hiring others to help fill the gaps.
Know Your Concept
What is it about your business that sets you apart from the competition? You need to identify your “secret sauce” and understand why you’ve been successful before becoming a franchisor, as you’ll need to clearly communicate the concept to your franchisees.
Crunch the Numbers
Write up a business plan for your franchise system and complete a proper cash-flow analysis to see if becoming a franchisor makes good financial sense. As any experienced franchise attorney will tell you, you don’t want to be in franchising if you or your franchisees will find it difficult to make a profit.
Choose Franchisees Wisely
Be cautious in selecting your first franchisees. Many new franchisors are tempted to accept marginally qualified candidates, but that can lead to problems. And besides, your very first franchisees set the course for your franchise system, so you should thoroughly vet each applicant to make sure they have what it takes to be a success.
Be Prepared for Growth
Small-business owners often want to grow quickly and award multiple franchises at the start. However, rapid expansion can lead to franchisee failure. To help prevent this, make sure you have the capital and personnel in place to support any new franchisees you take on.
If you think franchising is the right expansion strategy for your business, finding an experienced franchise attorney — one who fights for the rights of franchisors, rather than working with franchisees — can help you avoid potential pitfalls and enjoy success as a new franchisor.
For forward-thinking advice and expert answers to all your questions about franchising, turn to the award-winning legal team at the Franchise & Business Law Group. Our franchise attorneys have decades of experience working with franchisors, and we can guide the development of your franchise system and assist you in achieving your business expansion goals.
To discuss your plans to become a franchisor, contact the Franchise & Business Law Group in Salt Lake City, Utah, and schedule a franchise attorney consultation today.