Becoming a franchisor is an attractive option when business is booming and you’re thinking about expanding.
Building a franchise system isn’t easy, however, and many entrepreneurs dive into the process without being fully prepared. Franchising your business can be a great growth strategy, but you’ll have a greater chance of success if you avoid a few common franchisor mistakes.
Franchisor Mistake #1: Not Retaining Legal Counsel
No business owner is excited about legal fees. But if you’re planning to become a franchisor, having an experienced franchise attorney on your side is the best way to protect your interests.
The services of a top-notch business law and franchise attorney will add to your expansion costs, but the cost is negligible compared to the risks of going it alone. This isn’t the place to try and cut costs, because without the right legal advice, your investments in franchising may not pay off the way you expect.
Legal decisions regarding your Franchise Disclosure Document (FDD) and the type of business entity you choose for your franchise system are crucial. Hiring an experienced business law attorney is fundamentally important for any franchisor, but especially so during the establishment and growth stages of franchising.
Franchisor Mistake #2: Remaining Too Set in Your Ways
Entrepreneurs are deeply passionate about their business concepts. That dedication is critical for success, as companies need a leader committed to constant care and attention. This is especially true when the organization is in expansion mode.
However, franchisors must avoid becoming inflexible.
Certainly, business owners have the best understanding of their brand concepts. However, if that translates to tunnel vision and a franchisor becomes resistant to advice, the franchise system can suffer.
Not every franchisor’s concept is viable, but listening to feedback can help your brand grow. Don’t be too rigid to accept tweaks that improve your franchising business concept.
Franchisor Mistake #3: Keeping Your Franchisees in the Dark
Once you’re in business as a franchisor, selling franchises will be one of your top priorities.
However, to succeed as a franchisor, you must also prioritize support for your franchisees. Without adequate training, your franchisees won’t have the knowledge and skills to duplicate your business concept.
Offer your franchisees in-person training as well as a collection of educational and reference tools that include the secret to your business growth. Reveal the marketing strategies, management methods and trade secrets that led to your success, and your franchisees will be able to follow you down that same path.
The experienced legal team at the Franchise & Business Law Group can guide you through the process of franchising your business and help you achieve success. Contact our office serving Provo, Utah today to schedule a franchisor consultation.