How Do You Franchise Your Business?


Quick! Answer this trivia question: What is the largest franchise in the world?

If you said McDonald’s, you are correct. As the largest franchise, McDonald’s has over 38,000 locations worldwide.

Your goals don’t have to be as big as this fast food restaurant to create a franchise. If you plan to have multiple units available to showcase your business, franchising might be right for you.

Keep reading to learn how to franchise your business.

Understand the Responsibilities

Before you franchise your business, you should determine if it is the right path for you. Not many understand the responsibilities that come with a franchise. The owner is responsible for the following:

  • Recruiting
  • Training
  • Supporting franchisees

Your business and personal goals should align with franchising.

Create the Right Documents

Strategic franchise planning requires the creation of certain documents. The two most important are the Franchise Disclosure Document (FDD) and the operations manual.

The FDD preparation steps will depend on where you are franchising your business. The FDD must comply with state and federal franchise laws while being specific to your business.

The operations manual is confidential but your franchisees are to be trusted with it. This document will inform franchisees about the system requirements needed to open and operate a franchise business.

Coming up with a franchise development strategy is a key part of the operations manual.

Register Trademarks

When you franchise your business, you have to register trademarks with the United States Patent and Trademark Office. This way, your trademark rights will be nationwide.

The franchise development stage is the best time to conduct trademark searches. A franchise lawyer can use these searches to learn if your trademarks are protectable.

Establish the Franchise Company

When franchising your business, you need to establish a new franchise entity. This typically comes in the form of a limited liability company (LLC) or corporation. You can find many LLC formation services online.

The new company will then be in the business of supporting franchisees, building systems to grow, and selling franchises.

Register and File the FDD

The Franchise Disclosure Document needs to be registered and filed before you can start growing a franchise. The appropriate applications and notices you will file depend on the registration and filing states.

You’ll need to complete research to learn about the state-specific registration filing and registration requirements along with the laws.

Franchise Strategy and Budget

Once your legal documents are complete, you can focus on creating a franchise sales strategy and selling a budget. To form a strategy, you’ll want to learn about your target markets and target franchisees.

A franchise marketing budget can help you attract, train, and support franchisees without breaking the bank.

You can also hire a marketing company with expert franchise tips. Learn more info about this path now.

Franchise Your Business the Right Way

The process to franchise your business takes time, typically between 3 and 4 months. If you attempt to cheat the system to speed the process up, you’ll be in legal trouble and fall behind on development.

Becoming a franchisor in a legal way involves following the above steps. Upon completion, you’ll be able to offer and sell franchises.

For more ideas and tips on business, check out the other posts on our blog.