Joel Libava
Practically anyone with $15,000 or so can franchise a business idea these days. How?
By finding a franchise attorney willing to draft a Franchise Disclosure Document for you and register it with the proper authorities. Easy-peasy.
But having a business name and legal documents that allow you to offer and sell franchises is only part of the puzzle. There’s so much more. Good thing there’s another way to franchise your business.
Note: hundreds of new franchise concepts launch every year. That’s a lot of new businesses that have the potential to expand via franchising.
Now let’s get back to turning a business into a franchise business, along with who does this type of work.
Franchising A Business Model: You Can Always Hire A Franchise Developer
If you don’t want to franchise your business model on the cheap (by ONLY hiring a franchise attorney to create your FDD), you can use a franchise development firm. They can:
- Write your operations manual
- Help with branding
- Draft a training manual
- Write a business plan
- Write your FDD and franchise agreement
- Setup a franchise sales process
- Develop a franchise website
- Help you sell franchises*
And more.
*Some franchise development companies tell you they’ll help you sell your first few franchises. Experience tells me that’s not always the case.
And if you do go the franchise development route, expect to pay at least $100,000.
Of course there are firms popping up that will do it for less. A lot less. And that’s a problem.
As a matter of fact, that’s THE problem.
Money Can Buy Dreams, But It’s Too Easy To Franchise A Business
What I mean here is that you can pay a franchise attorney of a franchise developer to set up a franchise to sell. It doesn’t mean you have a business that’s franchise-ready. Or franchise anything.
Let me be blunt.
There are franchise development companies that will gladly and quickly take $100,000 of your hard-earned money to “develop your franchise” for you.
These firms will tell you “Your business is perfect for franchising.”
But is it?
Can your independent business be turned into a successful franchise opportunity?
Is your idea actually “great?”
Or is it great because someone is a little too willing to accept your check for $100k for franchising your business?
I say it is, and it’s those weak-ass, lazy, greedy, and unethical franchise development firms who are at fault.
Too bad THEY aren’t regulated.
Whoops.
Did I just open a
?
“The superior man understands what is right; the inferior man understands what will sell.” – Confucius
I Get A Lot Of Calls From Would-Be Franchisors
About once a month or so, I get a call like this:
“Hi Joel. I’m thinking of franchising my business. Can you help?”
Me: “I can’t personally help you franchise your business, but I may be able to suggest a couple of people who can help. Tell me about your business.”
They tell me about their business and their ideas, but 9 times out of 10, when I ask if they have opened a 2nd location, they tell me they haven’t. And that’s a problem.
So unless they have an opportunity that is either off-the-charts amazing sounding, or are offering something home-based, I don’t provide any names of franchise developers. There’s no reason to.
Follow Up Calls
Most of the time I tell these future franchisors to follow up with me when they’ve opened their 2nd location and have documented everything they’ve done, step-by-step.
I’m still waiting for any of them to call me back.
It Shouldn’t Be Easy To Franchise A Business
Some of the other calls I get are the “I haven’t sold any franchises” type.
“My franchise developer told me he’d help me sell my first couple of franchises. He hasn’t sold any, and doesn’t seem to like taking my calls as much as he used to.”
It’s more common than you think.
As a matter of fact, I call bull on these developers who promise to help new franchisors get off the ground by selling franchises for them. Because a lot of them just talk the talk.
Maybe it’s just me, but it feels like once these companies get their money, they fade into the background.
But not all franchise development firms are like that.
Some of them have the courage to say “You’re not ready to franchise.”
Or, “Your business isn’t suited for franchising.”
If more franchising business developers would do that, the franchise industry would be a lot healthier.
Right?
Because it should never be easy to “franchise a business.”
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