Tag: how do i franchise my business

Once you begin expanding your business by using investors you must be careful that you're not crossing the border into franchise territory. The definition of a franchise is an authorization by a company to a third party enabling them to carry out specified commercial activities, use their trademark, and follow their business model.  In exchange for that authorization, the third party compensates the company with fees and royalties. If you are intertwined in a business partnership that meets this criterion, you may accidentally have started franchising your business.

While there are many benefits to franchising your business, an accidental franchise could get you into deep water.  If you are providing an investor with a 'license' to use your business model and are requiring training and providing support, then technically you are a franchise.  There are legal repercussions to operating like a franchise and you could be subject to hefty fines.  Franchisees have rights of their own that could allow them to revoke their contracts, as well as the right to take further legal proceeding. You may even be culpable of a felony, in some states.

If you're concerned that you may be crossing into franchise territory and want to make sure you're legally in the clear, follow these simple steps:

  1. Control is in the hands of the business owner or licensee.
  2. There are no limitations on marketing and distribution of the products/services.
  3. Training is limited to the knowledge of the product/service.

If you feel that you have crossed into franchise territory, then you might want to contact your attorney or give us a call.  We can provide you with a litmus test to help you assess whether or not you are a franchise.

 

You may have intentionally created the culture of your brand or it may have evolved as you progressed.  Whatever the case, the culture of your brand needs to be solidified.  What are your values? What do you stand for?  What do you stand against?  What is the experience that you want ever customer to walk away with?  What is your Brand's mission?

By aligning franchisees and employees to your brand's mission, core values, vision and unique positioning in the market place, your customers will receive the consistent brand experience whether they are in Knoxville, TN or Reno, Nevada.

As John likes to say, "We are in the Cult business.  We create raving fans of your brand whether they are franchisees or customers."

Clearly defining your Brand Culture is an important factor to becoming a successful franchisor.