How to Create a Franchise System

How to Create a Franchise System How to Create a Franchise System Your success in building a business may at some point cause you to wonder if the next step forward could be creating your own franchise system. Before moving forward, some key vocabulary you will need to understand:
  • Franchisors - a person or company that grants the license to a third party for the conducting of a business under their marks
  • Franchisees - a person or company who is granted the license to do business under the trademark and trade name by the franchisor
A franchising system, as defined by the International Franchising Association, the industry trade group, is a method for expanding a business and distributing goods and services through a licensing relationship. In franchising, franchisors not only specify the products and services that will be offered by the franchisees, but also provide them with an operating system, brand, and support. The IFA notes that more than 120 diverse industries use franchising systems as their route to market, including but not limited to the following:
  • Automotive
  • Business Services
  • Commercial and Residential Services
  • Education
  • Lodging
  • Personal Services
  • Quick Service Restaurants (fast food)
  • Real Estate
  • Retail Food
  • Retail Products and Services
  • Senior Care and Medical Services
  • Table/Full Service Restaurants
The first step in deciding whether your business is a good candidate to become a franchising system is to evaluate it using some of the basic criteria for success in franchising:
  • You have been in business for more than three years using your current business model.
  • Your industry is growing in the current economic conditions.
  • You could train someone to do what you do in a reasonable amount of time so they could successfully operate a location of your business.
  • A franchisee of your business would be able to make at least $60,000 a year in running your business.
Next, it's important to get input from an expert that has a successful track record working with both those who want to purchase franchises and those who want to create franchise systems. Transworld Business Advisors, which has this successful track record and represents nearly 200 franchisors, has the ability to provide the essential guidance and materials needed to take your business into a franchise system. The Transworld Franchise Development Program includes prepared franchise documents; the Uniform Franchise Disclosure Document (UFDD); Franchise Agreement and all exhibits; a complete set of operations manuals; a franchise website designed exclusively for your business; marketing and advertising materials; the Franchise Sales Brochure; and a personal franchise consultant to coordinate the preparation of your franchise program to the standards of franchising professionals. The professionals at Transworld will work with you and your staff to determine the best way to structure your franchisor program. All items necessary, such as corporate entity in terms of regulatory acceptance, limitation of liability, financial disclosure requirements, tax implications, auditing standards, trademark usage, future spinoff possibilities, and Federal Trade Commission and State regulatory requirements, will be reviewed. All of our professionals have the specialized research skills, knowledge, and proper planning techniques that are needed to determine how to best structure your franchise system's corporate structure. If you feel that your company will qualify for franchise system development, call Transworld Business Advisors to access The Transworld Franchise Development Program at 1-800-205-7605 to arrange a review.