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Franchising Business in 5 Steps

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Franchising Business in 5 Steps

It is impossible to own a business and not dream of seeing it turn into a household name like McDonald’s or Burger King. You also might have considered franchising it at some point but never took the first step. Here’s a simple guide that breaks down the process for you: franchising business in 5 Steps!

With a proven success record, franchising business is the most popular way of expanding. A new franchise opens after every eight minutes on every business day so it is no wonder that many business owners are treading this path. And you could be next in the slot after some eight fateful minutes one day.

Step 1: Check if Your Business is Franchise Ready

Evaluate your business concept. The first question you should ask is if your business can be franchised, whether prospective franchisees will be likely to buy it. How unique is the business idea? Is it appealing to consumers in general? The concept has to attract both sides of the equation—prospective franchisees and customers. Furthermore, the business should be systemized and scalable, not something that needs your personal involvement to succeed. For example, if you are a graphic designer and your small design business needs you to create all the artwork, then it is unlikely that you will be able to franchise it.

Step 2: Check Your Finances

Once step one is cleared, get your financials in order. There is an Item 19 on Franchise Disclosure Document (FDD) that is of equal importance to both the franchisor and the franchisee. This is where you have to record your financial performance with all the small details, and if everything is not in order here, then the franchisee can easily decline working with you. You can seek legal consult while formulating the draft so your information appears without discrepancies. On the other hand, the franchisee also consults a lawyer while scrutinizing the FDD so a legal consult beforehand can spare you from unnecessary delays and arguments.

Step 3: Make Important Decisions about Your Company

You will have to decide upon some parameters as you prepare to franchise your company.

  • Set royalty fee
  • Fix a franchise fee
  • The term of your franchise agreement
  • The size of the territory you will allocate to franchisees
  • The geographical area you are willing to offer
  • Your marketing plan for the franchises
  • The duration and type of training program you will offer

As a new franchisor, you may never realize the impact these decisions might have on your company in the long run so it is imperative that you think them through carefully.

Step 4: Register as a Franchisor

Once you are done with the important decisions, you can create the paperwork and submit it to the authorities. Be prepared for critique. They might also ask for additional disclosures before accepting your application. Then you will have to wait for state approval that can take up to months.

Step 5: Sell Your Franchise

Make key hires that will especially overlook the task of seeking franchisees for your company. One of the most pressing concerns is to find good franchisees and convince them to buy your idea. Your salesperson should be good enough to make a compelling story that is factually correct and appeals to.

We hope that this blog post gave you a better idea about franchising business in 5 steps! If you would like to learn more about business, keep reading ActionCOACH blog!


ActionCOACH, the world’s largest business coaching firm, was established and founded in Brisbane, Australia by Brad Sugars in 1993 when the concept of business coaching was still in its infancy. Since franchising the company in 1997, ActionCOACH has grown to more than 1000 business coaching franchises operating in more than 60 countries. ActionCOACH specializes in coaching small to medium sized businesses as well as executive teams and group coaching. ActionCOACH maintains its growth and strategic alliances by continual development of cutting-edge innovative technology, proven business processes and systems to add value, satisfaction and additional income streams for its franchisees.