Thinking about franchising? Not sure where to start? Whether you want to grow your business or invest in a franchise, this guide breaks it down in simple terms. As a franchise expert, I’ll walk you through how franchising works, why it’s a great opportunity, and what steps to take next.

Table of Contents:

1. What is a Franchise?
2. How Does Franchising Work?
3. Why Should I Franchise My Business?
4. I Want to Franchise My Business… What’s Next?
5. I Want to Buy a Franchise… What Do I Need to Know?
6. Final Thoughts

What is a Franchise?

A franchise is a way of doing business where one company (the franchisor) allows someone else (the franchisee) to run a business using its brand, systems, and support. In return, the franchisee pays an upfront fee and ongoing royalties from their revenue, usually between 3-8%, depending on the type of business.

Think of it like this:

Instead of starting a business from scratch, a franchisee buys into a proven system with a well-known name, a tested product or service, and an established and trusted customer base. This makes franchising one of the lowest-risk ways to start a business.

How Does Franchising Work?

Franchising is a win-win for both the franchisor and the franchisee. Here’s how it works step by step:

• Successful Business Model – A business owner develops a repeatable system that works in different locations.
• Franchisor Builds a Support System – They create branding, training, and marketing programs for franchisees.
• Franchisee Buys In – A person or investor pays a franchise fee to operate under the brand’s name.
• Training & Setup – The franchisor helps the franchisee set up, train staff, and start running the business.
• Ongoing Support & Royalties – The franchisee follows the system, pays royalties, and benefits from the brand’s reputation and support.
• Growth for Both – The franchisee earns from the business, and the franchisor expands the brand with less financial risk.

Why Should I Franchise My Business?

If you’re a business owner wondering, “Should I franchise my business?”, here’s why many choose this path:

• Faster Growth – Franchisees invest in opening locations, allowing your brand to expand quickly.
• Lower Risk – Instead of taking on all the financial burden, franchisees use their own capital to start new locations.
• Stronger Brand Recognition – More locations mean more visibility, making your business more recognizable and valuable.
• Motivated Franchisees – Unlike hired managers, franchisees have a personal investment in the business, so they work hard to make it succeed.
• Steady Revenue Stream – Franchise fees and ongoing royalties create a consistent income for you as the franchisor.

I Want to Franchise My Business… What’s Next?

If you’re serious about turning your business into a franchise, here’s what to do next:

• Evaluate Your Business – Is your business profitable? Can it be duplicated in other locations?
• Start with Creating Your Business Model – Setup costs, joining fees, royalties, advertising, and ongoing expenses.
• Set Up Legal Documents – Work with a franchise lawyer to draft a Franchise Disclosure Document (FDD) and contracts.
• Build Your Franchise Operating Systems – Develop detailed training programs, operations manuals, and branding guidelines.
• Find the Right Franchisees – Look for experienced and knowledgeable individuals who align with your brand’s vision.
• Train & Support Your Franchisees – Their success is your success. Provide training and guidance for profitability.

I Want to Buy a Franchise… What Do I Need to Know?

If you’re thinking, “I want to buy a franchise, but I don’t know where to start,” here’s what you need to consider:

• Research Different Franchises – Look at the brand’s reputation, profitability, and support system.
• Understand the Costs – Besides the setup costs and franchise fee, expect royalties, marketing fees, and operational expenses.
• Read the Franchise Agreement Carefully – This is a legal contract. Have a franchise lawyer review it before signing.
• Assess the Support System – Does the franchisor provide training, marketing, and operational support?
• Talk to Other Franchisees – Ask about their experiences, earnings, and challenges.
• Know Your Responsibilities – Running a franchise requires hard work, leadership, and following the franchisor’s system.

Final Thoughts

Franchising is one of the most powerful ways to grow a business or become a business owner with lower risk. Whether you want to franchise your business or buy a franchise, knowledge is key.

I offer personalized coaching to help you understand the franchising process and make the best decisions for your future. Go to my "Contact" page and send me a message, and let’s discuss how you can start, grow, or invest in a franchise the right way.