I have a friend who owns an organic wine business. She runs a tasting room and retails her wine. What steps does she need to take to franchise her business?
The first step is a sound (honest) feasibility study. The desire to franchise ones business often leads to short sightedness when it comes to an honest assessment of the situation.
Once feasibility is complete, however, there are three key players that the business owner should engage.
First, a franchise consultant who will act as a mentor and guide through the minefield of planning and franchise start-up should be retained. And hopefully, this would be the same person who assisted with the feasibility study. It gives the owner an opportunity to assess the personality of, and the type of “fit” they might have in a long-term relationship with the consultant. (Interview several consultants and choose the one who asks tough questions and makes you think. Too often, a consultant encourages a business owner to franchise because there is a fee to be earned. If you speak to a consultant who encourages franchising before they even know you or your business, then run as fast as you can to your next appointment.)
Second, interview and hire a franchise attorney. The field of franchise law is complex and it takes an expert in the field to properly develop the required documents. (Your consultant probably will have recommendations for you, and conversely, your attorney of choice will also have recommendations regarding consultants.)
Third, a CPA is required to perform an audit of the franchising company, and that audit will be part of the legal documents drafted by the attorney.
Franchising a business is both an art and a science. It is not a simple matter of handling a set number of tasks, but rather a giant puzzle that must be constructed with skill and great care. And above all, know that franchising is a people business. If your friend is not a true mentor by nature, all the skilled hands in the industry will not result in success. However, for the right “type” of person, franchising can be the most exciting growth path to choose for expanding a business.