A Guide To Franchise Development

Franchise development: where your business idea can go from a single dream to a nationwide team!

Everyone has heard of franchises, but many people need to know the intricate work involved in creating a successful company that operates in dozens or even hundreds of areas. There are numerous moving components to assure the success of a franchise, and strategic franchise development is important for creating and expanding a profitable company.

Now let’s talk about the fundamentals of franchise development and how these procedures can often make or ruin your company.

What is Franchise Development?

It combines real estate, sales, marketing, and law. It is the strategic process from the outset (idea) to the phase of expansion and beyond.

What steps are involved in the franchise business development process, and who is in charge of making sure a franchise takes off and stays achievable?

You must first and foremost draft a business plan for your franchise. A target buyer profile, franchise charge, royalty fee, advertising fund model, and other items will all be included in this blueprint. Developing a viable financial plan that benefits the franchisor and the franchisee is another essential stage in creating a successful franchise.

The management of legal paperwork and the state registration procedure are also a part of the growth process. Selling franchises in the United States requires submitting a Franchise Disclosure Document to the Federal Trade Commission (FTC) and updating it every year.

An operations manual and legal documents must provide a fully defined and documented operations system for a franchise system. For the franchisee, this manual will be an essential sales and training resource.

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Franchise Development Steps and Processes

Franchise development strategy includes the following steps and processes:

Franchise Assessment

Deciding if a company should be franchised and whether it is franchisable, considering growth objectives, financial performance, industry variables, and available money.

Legal Compliance

Creating, publishing, and upholding a registered Franchise Disclosure Document; creating Item 19 financial performance statements; adhering to franchise regulations; protecting intellectual property; and enforcing franchise agreements that establish and preserve a franchisor-franchisee relationship.

Forming Your Franchise Company

Establishing a new franchise business that will sell and provide franchises, assist and teach franchisees, and make money from royalties, franchise fees, and other franchise-related operations.

Operations Manual Development

Creating and keeping up a franchise operations handbook that informs franchisees on ongoing requirements for the growth and management of the franchised firm, as well as system standards and training requirements.

Sales Strategy and Brand Positioning

Setting a franchise sales plan and creating digital, video, and website content that conveys your brand’s story, differentiators, value proposition, and franchisee transformation.

Franchise Sales Discovery Process

Developing franchise sales procedures, presentations, landing pages, and other materials that interact with potential franchisees, educate them on the benefits of the franchise opportunity, and lead them through a discovery phase in which the franchisor and the potential franchisee assess if they are a good fit.

System Growth Strategy

In order to increase customer experience and boost system-wide sales and profitability, franchisee performance should be trained, coached, and monitored. Brand standards should also be enhanced. KPI-driven improvements, marketing campaigns, and system standards should all be implemented.

Looking for Help with Your Franchise Development? Contact our team at (504) 345-1170 or by email and let’s discuss how our legal + franchise development growth services can help you Win at Franchising!

What is a Franchise Development Company and Franchise Developers?

Franchise development companies are corporations that help in the franchise development process. Employees of a franchise development organization who help with the franchising process are known as franchise developers, sometimes known as franchise consultants. To identify oneself as a franchise developer or franchise development organization, there is no specific qualification, approval, training, or educational requirement.

Tasks related to franchise development plan that experienced and skilled franchise developers can help with include:

Deciding if you're prepared to become a franchise
Offering guidance on franchise expansion plans
Creating instructions for operations
Developing a sales plan
Assisting you in developing industry connections

The objective is always to create a profitable franchise system in which you franchise your company, draw in, train, onboard, and assist qualified franchisees who successfully launch and run new sites.

Different Faces of Franchise Developers

There are a number of organizations that can lead franchise development, each with its own specialties and goals.

In-House Development Teams: Large franchisors frequently have in-house development teams whose only goal is to create new franchise opportunities. Although they might not have the same depth of knowledge as outside advisors, they do have a close understanding of the franchise brand development and the market.
Independent Consulting Firms: Companies employ these organizations to help with the development process. They contribute industry best practices and an unbiased, outside viewpoint.
Franchise Brokers: Franchise brokers, also referred to as sales consultants, work to link qualified opportunities with prospective franchisees. They might represent several brands, so prospective franchisees should carefully consider their recommendations.

Read More: Types of Franchises

How to Evaluate Franchise Developers?

It is advisable to exercise caution when dealing with franchise developers and development organizations that approach you, purport to provide a whole suite of franchising services, including the legal drafting of your FDD, or present franchise sales as simple. Franchise developers shouldn’t be producing your FDD or saying that it will be examined by their legal counsel because they are not franchise lawyers. Crucial things to think about:

Your franchise lawyer should prepare your FDD, which is a legal document. The legal and regulatory documents that will serve as the cornerstone of your franchise system are your franchise agreement and the FDD. Something is improper if a franchise developer tells you that they will draft your FDD and have it checked by one of their in-house attorneys, or that you can retain legal counsel to check their work. The developer, not you, is the client of an in-house attorney. Working directly with your own attorney is necessary if you want to take advantage of the protected communications that come with the attorney-client relationship and be held accountable to you. Will a franchise developer care and help you if a legal issue comes up years later, or will they tell you it's a legal matter and suggest you see a lawyer?
Be careful with Document Mills and Packaging Shops: Be careful with developers who offer to handle all aspects of your FDD development, including the legal work, for a single flat charge. In reality, they are providing you with everything—legal counsel from non-lawyers, FDDs, operations manuals, websites, planning guides, and so forth—but they never truly give anything useful. Just marketing material, shoddy paperwork, and a generic sales approach that eventually causes errors and annoyance.
Never assume that a developer is working with everyone listed on their website. Realizing how crucial it is to have a franchise lawyer draft your FDD, some franchise developers list advisers and team members on their website who aren't actually with them. They take this action to conceal the true size and area of expertise of their staff. Developers frequently list independent franchise attorneys who work for other companies or have no direct connection to the franchise developer on their own website.

Read More: Which Industries are Most Likely to Franchise?

We Can Help with Your Franchise Development

Are you looking to expand your franchise and take your business to the next level? At the National Franchise Association (NFA), we’re dedicated to supporting your franchise development journey every step of the way. With our expertise, resources, and network, we provide perfect solutions to help you grow your franchise successfully. Whether you’re a seasoned franchisor or just starting out, our team is here to guide you through the complexities of franchise development, from strategic planning to operational support.

Ready to take the next step in your franchise development? Contact us today!

Phone: (504) 345-1170

Email: mike@nationalfranchiseassociation.com

Let NFA help you build a stronger, more successful franchise.