How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
How to franchise your business
Whether your business is fledgling or well established, there may be merit in franchising it to expand your reach, increase your brand visibility and gain new customers. If this is something that you have considered but not pursued due to a lack of understanding of the process and the potential benefits, this post is for you.
.
Is your business suitable for franchising?
First, you must consider whether your business is a suitable candidate for franchising. This growth strategy requires that other people are able to replicate your business in their locations, so you must have a sound business model with proven profitability and be prepared to support your franchisees in becoming established.
.
Seek legal advice
There is an established legal process you must follow to franchise your business. You will need to consult with a franchise attorney, who will be able to help you to determine the most appropriate legal structure for your business and assist with drafting the necessary documentation and franchisee onboarding processes.
.
Create a Franchise Disclosure Document
You will need to create a Franchise Disclosure Document, which will detail all the information that potential franchisees will need to know about your business so they can determine whether it is right for them. This will include historical financial performance and evidence-based future projections.
.
Form a legal entity
To protect yourself from any debts or legal liabilities that may be incurred by your future franchisees, you should form an independent legal and accounting entity that will allow you to distance yourself from the business while enabling you to sell the rights to your brand, intellectual property and experience to approved franchisees.
.
Protect your IPR
You will need to protect your intellectual property and may wish to trademark your logo, website and other identifying business information, both to ensure that you and your future franchisees are legally compliant when applying them in the public domain but also to prevent them from being misappropriated and used by your competition.
.
Market your business.
You may wish to join the Canadian Franchise Association to gain access to member benefits and raise your visibility. You could then showcase your business at franchise networking events, such as the CFA National Convention, and become a part of the franchising community. Furthermore, you should update your online presence to reflect your new status as a franchise business and promote yourself as seeking appropriate franchisees. Target platforms that potential franchisees are likely to frequent, and do not be afraid to seek advice from industry experts.
Franchising your business is an effective growth strategy, so take the time to consider whether this is a path you wish to pursue and seek advice from a trusted legal advisor if you decide to proceed. Good luck!
.
A few more points to think about on How to Franchise Your Business.
.
