Best 5 Tips You Should Know For Franchising Your Business
Franchising your business will give you the chance to grow your brand and make it popular; consider that instead of starting a business on your own, you will use the credit of a well-known brand; but there are a few requirements that should be met in order to guarantee the growth of your business.
These requirements include finding the right lawyer, providing a franchise disclosure document, creating an operations manual for your franchisees, etc.
Just imagine what would happen if Richard McDonald did not make its franchisees committed to following its special recipe and standards. The business would have not been as expanded and popular as it is right now. That’s how important it is to make sure you know the essential tips for starting a franchise.
To understand and learn more of Franchise Agreement, read the article below:
6 Essential Elements of Franchise Agreement
What are These Tips?
1. Choose the Right Lawyer
Depending on where your business is located and where you want to run its franchise, various regulations may be applicable. Especially there are financial and tax matters to consider when franchising a business. So you need to consult with an expert lawyer who is well-aware of the laws and regulations governing those jurisdictions.
2. Provide a Franchise Disclosure Document
As defined by franchiselawsolutions.com the franchise disclosure document, also called the FDD, is the legal document you’ll need to sell franchises. It’s required by federal and state law and is the legal foundation for your franchise.
In the United States, this document should be given to your franchisee no less than 14 days before signing the franchise agreement or accepting payments from a franchisee.
This document is divided into 23 items, informing the franchisee about the franchise, the franchisor, and the legal obligations of both the franchisor and franchisees. You can see a sample of this document.
Therefore, in order to provide this document legal and commercial consultation is required.
3. File or Register your FDD, if required
An FDD or Franchise Disclosure Document may need to be registered or filed depending on your jurisdiction. For instance, currently, 13 states including New York and Michigan are franchise registration states. On the other hand, there are franchise filing states such as Texas and North California.
The difference between these two systems is that, in franchise registration states, a franchisor must register its franchise with the state and file its FDD annually. Conversely, in franchise filing states, a franchisor must do a one-time FDD filing.
4. Create an Operations Manual for your Franchisees
An operations manual is a document in which the necessary instructions that a franchisee should follow are provided. This is basically a how-to document containing customer service expectations, customer complaint resolution, employee training, and generally all the standards a franchisee should follow in order to stay in compliance with the franchisor.
5. Develop a Marketing and Sales Plan
In order to find your prospective franchisees, consulting with a marketing agency might be helpful. Besides you need to set aside the required budget for attracting, training, and supporting franchisees.
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