1. Determine if your business is one that can be franchised. First you need to have a proven model, not just an idea. Preferably at least 2 locations operating profitably for at least a year each. Also, the business has to have broad appeal (a I Love New York t-shirt store is probably not a good fit for franchising), and the business shouldn’t require a Hyperspecialized skill that only a handful of people have. This is often referred to as a feasibility study.
  2. Make sure that you are fit and ready to be a franchisor. You and your existing business have to be prepared for you to take a step back. You also have to have the funds lined up to spend between $150k-$350K, depending on the complexity of your business, from the time you start until the franchise is self-sustaining.
  3. Build the right team. Eventually you will need a support department, accounting team, training team, etc., but for now you need, at a minimum, an expert franchise sales person, someone with experience running the operations of a franchise, someone that can help you develop a training program, support program, and operations manual, and a franchise attorney. For many emerging franchisors, bringing on a franchise consulting company makes the most sense as you get everything except the attorney under one agreement, often for a fraction of the cost of in-house.
  4. Start the documentation process. Document every step of your business, from how to order products to suggested operating hours and target margins. This is will later become your Operations Manual. Again, a good franchise consultant or Operations Consultant can help you with this.
  5. Determine the nuances of your franchise offering; how much control you require on your look and feel, what your involvement will be in the franchisee’s supply chain, the initial and ongoing fees you will offer, etc. This is the most complicated part of becoming a franchisor.
  6. Determine your growth plan and strategy. Do you want to start regional, and then go national, or hit the national (or even international) stage all at the same time? How many new owners can you support in a month?
  7. Build a marketing plan and budget. This will typically include franchise brokers, franchise portals, exhibitions, as well as organic and paid web traffic.
  8. Design and understand your mutual evaluation process and what you need in a franchisee. Seek legal guidance on what information you can share and when and seek business guidance on what kind of individual will most likely be a good fit for your organization.
  9. Design your training, onboarding, and support processes. These processes have to cover both proactive and reactive support and training that extends from franchise agreement signing through the end of the franchise relationship.
  10. Execute. Be careful that you award only the right franchisees in the right markets, and be willing to be flexible on your model and your offering as you go to market.