Thinking of Franchising Your Business? 4 Things to Do First.

Franchise legal documentation is just the tip of the iceberg.

When considering franchising to grow your business, there are a number of things you should do to prepare your business, before assuming the role of Franchisor.?

Follow these four first steps and create a solid foundation for any franchise:

1. Clean your books. In preparation for franchising, scrub the business’ books – remove all co-mingled expenses, owners on payroll, incorrect inventories, extraneous spend, etc. I recommend adopting GAAP, and use professional accounting services to ensure their financial metrics are clearly reported. Further, consider adopting industry-specific charts of accounts, and understand how to code and use them.
2. Know your key metrics. Once the books are clean, it’s time to put them to good use. Identify the 3 key metrics that drive your profit margin, and adopt a way to track them in real-time. In restaurants for example, this includes creating a dashboard of labor costs, cost of goods, key controllables, and ultimately, EBITDA or profit margin. Create a dashboard: each of these 3 key metrics should be reported as: actual, a percentage of sales, compared to budget, and change from week prior.
3. Document your procedures. Documentation of processes, procedures, and policies for the organization is the bulk of the work in preparing to franchise. Start by creating a list of what needs to be documented, as you proceed through every day for a week. Considering having to train someone new to your business, who knows nothing about it or the industry. What would you need to spell out, explain or detail out step by step?
4. Define your brand. A brand book is a great place to start – but also consider more than just various marketing executions for your brand. Speak to a trademark attorney who can advise you on the use of the brand name outside of your current market. If possible, secure a Federal Trademark Registration. Consider the wide scope of the brand that must also be documented, including the mission and vision, customer service expectations, and interior décor.

Do you need assistance with any of these steps?

Curious about what to do next?

Ready to jump-start your growth?

Reach out and contact us to get started on a comprehensive growth plan for your restaurant business at FullCourse.com.