You want to grow your business. You believe franchising is the way to go but have learned that you are not quite ready yet. Is there anything you can do to get ready?

Step 1 — Am I ready?

The first thing you need to do is to find out whether or not you are ready to franchise your business. Go to the section in our website titled Ready to Franchise? and take the quiz to help you determine whether or not you are ready. 

Step 2 — Protecting the name of your business

Getting a trademark to protect the name of your business is something we do for our clients at the start of a franchising project, if they do not already have a one in place. However, if you feel you are not ready to franchise now, but will definitely do so in the future, getting your trademark at this point is a good idea.

You can start the process by going to www.uspto.gov  and clicking on Trademarks on the left-hand column. You can learn about the process of obtaining a trademark; you can search to see if someone else  is already using your name and has a trademark; and, you can also apply for a trademark. Call us if you have any questions about this process.

Step 3 — Developing, testing and recording procedures

Another step you can take in anticipation of franchising your business in the future is to make sure that all your operating procedures are easy to replicate. Also documenting them at this time will not only make your business run more efficiently, but will also save you time and effort when you do franchise it. Make sure that you have procedures for:

• Getting customers (generating leads, managing leads, and closing sales –which depending on the business may include making presentations and writing proposals)
• Administrative procedures to convert a lead into a customer
• Delivering the service or selling the product
• Customer service (including all customer communications and handling complaints)
• Staffing (how many employees, what they do, how are the best candidates chosen, management techniques that work in your business, etc.)
• Maintenance and cleaning
• Billing and financial procedures
• Ongoing marketing activities
• Any specific technical information and processes that apply to your business

Step 4 — Creating strong relationships with vendors

Depending on the type of business you have, you most probably use suppliers and vendors for equipment, goods, and supplies. Start with the end in mind when you choose your suppliers. Ask yourself:

• Will they be able to deliver all over the US?
• Will they be able to handle sudden increases in demand for their products?
• Will they provide impeccable customer service and act as partners?
• Will they be able to give you quantity discounts as you add more franchisees so you can pass on better pricing to them yet still be able to make some money to recoup the investment you’ve made in developing these relationships?

Choose only those suppliers that can provide what you need now and when you franchise.

These steps will make your life easier when you are ready to franchise. They will also make your business more efficient and valuable even if you decide not to franchise. Let us know if you have any questions on this subject. We will be glad to help.

Related posts:

1. Is the Name of your Business Protected?
2. I want to franchise in the future, is there anything I can do now?
3. Are your Franchise Prospects Thieves?

The FDD is a lengthy document that describes the company history, the business, the terms, and the associated costs. The FDD contains a copy of the Franchise Agreement as an exhibit.  Customized FDDs and franchise agreements are effective during the recruiting phase and become tools to manage the future franchise relationship.

In addition to ther federal compliance requirements, some states have additional requirements. Complying with state laws can be cumbersome and costly. Following is a list of the states that require registrations and or filings grouped into three categories: Most time consuming and costly, less time consuming and less costly, and easy filing states.

Registration states are those states which require the submission of an application, a copy of the FDD and the payment of an annual fee. The application and FDD are reviewed by state employees upon submission. During the review process questions may arise and the state may require the FDD to be amended prior to approval of the application. The annual registration fees can be as high as $1,100 and  the application process may take up to four months or even longer.

Exemption states differentiate franchising from other Business Opportunities. These states have laws requiring  franchise companies to file an form that exempts them from paying the state’s Business Opportunity Fees. The exemption form must be filed before a franchise company can offer a franchise in an Exemption State. Filing for an exemption is typically a one-time event. However, some states such as Florida have an annual filing requirement. The fees associated with exemption filings are usually quite low, $100 or less.

1.  Most Time Consuming and Costly Registration States

• California
• Illinois
• Maryland
• New York
• Virginia

2.  Less Time Consuming and Less Costly Registration States

• Hawaii
• Indiana
• Michigan
• Minnesota
• North Dakota
• Rhode Island
• South Dakota
• Washington
• Wisconsin

3.  Easy Exemption States

• Connecticut
• Kentucky
• Texas
• Florida
• Nebraska
• Utah

When a franchise company does not have a federal trademark, the states of Georgia, Louisiana, Maine, North Carolina and South Carolina require they register an exemption filing with the state. This is filing is not needed otherwise; that is, a franchise company that has a federal trademark is not required to comply with any filings requirements in the states of GA, LA, NC, ME and SC.

All other states do not require any registration or filings at the state level and are thus termed Non Registration/ Non filing states. In these states compliance with the FDD is sufficient.

Related posts:

1. Franchise Offerings Using the Internet
2. Franchising: what is it, really?
3. Franchisees, Franchisors: Do You Need a Surety Bond?

One of our main objectives is to educate. We felt that adding a blog to our website would allow us to more effectively achieve this objective. So here it is. We plan to have different categories that will allow the readers to qucikly refer to the information they want.

We hope that you enjoy reading and interacting with us!

International Expansion Experts

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