What is a franchisor?
A franchisor is a person or company that grants a license to a third-party, giving them the right to open a new location and sell products or services using their brand, intellectual property or expertise. The franchisor is the original business that sells the right to use its idea and name.
Related: Investing in Franchises: Choosing the Right Franchise (And Is it Right For You?)
What does a franchisor do?
The franchisor selects qualified individuals who understand the franchise’s concept and agree to follow the system that the franchisor created to maintain their standards. The franchisor ensures that those standards are met across all locations and steps in if any of the locations are deviating from expectations.
The franchisor is also responsible for making changes to the product or service based on industry trends and customer demand. They look for ways to improve the systems currently in place and provide the franchisee with the materials and processes for training employees and for developing advertising and merchandising standards.
Related: What Is a Franchise Tax? An Introduction
How do you become a franchisor?
Here are the basic steps you can take to become a franchisor:
1. Determine if franchising is feasible
Consider whether your concept has appeal for both consumers and franchisees and if your business can be systematized and replicated. If it requires your personal touch as a business owner to make it work, franchising might not be the best option.
2. Get organized
Think through the process of how your business works, from marketing to staff training. Develop an operations manual with all of your best practices and policies. Create an approval process for signing off on major decisions.
3. Find a franchise lawyer
A lawyermight be able to walk you through filling out the Franchise Disclosure Document. During this process, you set pricing, create your franchise agreement and take steps to protect your intellectual property.
4. Be selective choosing franchisees
You may consider carefully evaluating people who apply to franchise your business. While it can be easy to find people who have the resources to launch the business, they may need the right background to fully understand your concept. This person will be representing you and your brand, so it’s important to be selective during the interviewing process and carefully evaluate each candidate.
5. Establish and enforce brand guidelines
When you are a franchisor, your company brand is one of your most important assets. One of the greatest risks of franchising can be giving new people the ability to represent your brand. You can monitor a new franchise by paying attention to their social media posts to ensure they’re representing the brand accurately.
Related: A Guide to Running a Successful Fitness Franchise
