Figuring out how to squeeze more value form your service business is not necessarily as hard as you might think. I mean, you spend years developing a reproducible process to simplify your own work efforts, why not consider extending the model to be implemented by others? That would mean franchising your business.
Before you think this is ridiculous, just think about it for a few minutes. Selling a franchise is no different than selling your business model. You already know more about your business model than almost anything else. In the end, you probably can’t service more than your immediate market anyway. So by franchising your business and selling the model in other markets you find a way to extend your own company’s reach while simultaneously strengthening your brand.
Document your business model – Your business model is your biggest asset. Every service provider finds a way to differentiate him or herself from the competition. Making sure that you have a document that describes your model, its advantages and its weaknesses tucked away is the beginning of productizing your service model for a franchise.
Research the market to see what else is out there – In some cases you may think initially that your idea is totally unique and then upon a little research you find out that it is not. Should that scare you away? Not necessarily. The fact that another business is out there offering the same thing can mean that your model is valid. Yes, it also means competition, but every business has to deal with that. Truly unique service models are very unusual.
Build a viable brand – Your brand is everything. You do not have to be a huge company to have a compelling brand. You can trademark your brand for $250.00 with the U.S. Patent and Trademark Office. Registering your brand gives you instant credibility. Your brand and your value proposition will be what you leverage to attract future franchisees.
Test the market – Because your brand is so important, you may want to test the market in a limited fashion with a “throw away” concept. This will validate your business model in the real world without putting your brand at risk. You can do this by creating a hyper-focused business that serves a very local market. Build a website to market the product and find some local advertising channels or launch a local ad campaign via Google Ads. This will enable you to test your market and business model (not to mention some advertising approaches). Once you’ve validated all you need to you can sunset the original business by retargeting the old website to the new one. This can be done for a few hundred dollars in hosting costs, website development, ads, etc. You can control how much to invest in this endeavor and it does not have to be very much; just enough to feel comfortable that your concept is working in the real world.
Research filing requirements - Each state has different laws regarding the registration of a franchise. Some, like Massachusetts, have none at all. Some states consider selling a franchise the same thing as offering an investment vehicle, such as a stock or bond. That means that you must file with the state that you are marketing to and in some case produce an offering circular in addition to other materials. The Federal Trade commission also has very specific requirements for information that they mandate be included in Franchise Disclosure Documents (formerly UFOCs). This is to protect consumers, which is their mandate. So you have to spend some time getting your house in order and building proper documentation before you start to sell your franchise openly. Information about Franchise Disclosure Document rules can be found at http://www.ftc.gov/.
Begin marketing your new franchise – Now that you are a franchise operator, you need to find some time in your day to market your opportunity. My advice would be to start slowly with targeted ads via online bulletin boards such as Craigslist. There are also a variety of companies that specialize in marketing franchises for you. These include sites like Franchise.com and others. You will have to attract pretty decent volumes of interest before you get your first franchise. Make sure you are prepared to provide adequate support or your venture will not last long.
In the end, this approach will enable you to continue to provide your services in your home market while soliciting recurring revenue from outside your range. This approach not only represents a new source of revenue for your business, but helps build lasting value as well.
Contact us today at http://www.jlroy.com/ to learn more about implementing this approach.
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