What Does It Take To Be A Franchisor?

The process of a business owner becoming a Franchisor is not as simple as it seems. There are many steps you need to note before embarking on franchising to expand your business. Below are some basic guidelines for you to take note, on your way to becoming a Franchisor.

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Step 1: Research On Your Local Law

Franchising regulations vary from country to country, sometimes even state to state. Therefore, it is important to research on your local Franchise Law to understand your basic qualifications and roles of becoming a Franchisor.

Step 2: Trademark Your Brand

To protect other businesses from copying your brand, you should trademark your Trade Name and Logo, at the very least. By doing this, it allows exclusivity to your brand and products. Who wants to invest in a business where everyone is selling a product which is highly similar to yours?

Step 3: Establish A Franchise Model For Your Business

Unless you have in-depth franchising knowledge or experience, it is recommended to engage a franchise consultancy firm to advise on your franchise business model. The basic thought is that if instead you engage a general business consultancy firm, they may not be proficiently equipped to highlight the necessary points to make your franchise model work. Key deliverables to obtain from such franchise consultancy services should include a Franchise Business Plan and Franchise Manual. The Franchise Business Plan should cover your goals and objectives, and financial pro-forma for franchising while the Franchise Manual will be a detailed document, explaining step-by-step operating procedures specific to your business. Alternatively, you can also check with your local Franchise Authorities whether there are any available franchise seminars you can attend to gain further insights.

Step 4: Determine Your Level of Support to Franchisees

One of the biggest draws for potential Franchisees to franchise concepts would definitely be the level of support provided by the Franchisor. After all, if there is barely any support is provided, wouldn’t it be almost the same as setting up your own business? Critical areas of support should include operations and human resource management, both of which are integral to any business. Training procedures and schedule will also have to be carefully planned to facilitate optimal knowledge transfer to attain efficiency and effectiveness. Alternatively, you can check with your local Franchise Authorities to see if they can help in any way.

Step 5: Identify Your Personnel Involved In The Franchise Support

The next step would be to identify the personnel who would be providing the necessary support to your Franchisee and his/her franchise unit. Arrangements have to be made for their absence while they are on training duties so as not to disrupt your own operations. You may need to look at the option of expanding your payroll budget to accommodate more staff to facilitate this stage of franchising.

Step 6: Create Your Franchise Agreement

Creating a thorough Franchise Agreement is very important as this will specify the requirement, responsibilities and limitations for both the Franchisor and Franchisee. More importantly, it may protect you as a Franchisor in the event of disputes with your Franchisee. This is where your Franchise Consultant (if engaged in Step 1) will come in handy. The Franchise Consultant should work closely with your Legal Advisor to draft the Franchise Agreement so as to be sure that all potential loopholes are covered. Of course, engaging a Legal Advisor who already has extensive experience in drafting Franchise Agreements would definitely be an advantage.

Step 7: Market Your Franchise

Having your Franchise Business Plan and Franchise Manual merely makes you prepared for franchising, but not yet a Franchisor. What makes you a Franchisor is the ability to successfully attract business investors, or Franchisees. To do so, you must let the news out that your brand is available for franchising. There are many ways to market a franchise. The most common method is to participate in franchise events or fairs. Such activities attract prospective investors and you will have the opportunity to showcase your franchise brand to them and increase awareness.

Another alternative is to search for websites that offer a franchise listing function so as to have an online presence. In today’s digital era, starting a search on the internet is normally the first avenue people adopt when looking for information and you should take advantage of this. Additionally, not having an online presence may portray an outdated image, causing less appeal to prospects. However, do take note that such franchise listing websites must have credibility and it is up to you to conduct due diligence before engagement. A good gauge would be to see of the website has credible partners, such as government agencies or established firms, so as to ensure healthy online traffic.

The last method that you may want look at is to simply engage a Franchise Marketing firm. By doing so, you are able to save time and effort as all the work will be carried out by the company instead. You will be able to focus solely on the operations side of your franchise business. Remember, your role as a Franchisor is to provide assistance in setting up a franchised unit.

Step 8: Signing The Franchise Agreement

To officially become a Franchisor, the last step would be to sign a Franchise Agreement with your Franchisee. Most people don’t understand that the Franchise Agreement is a customized legal document, rather than a standard form of contract. To fully understand both parties’ needs and considerations, extensive discussions should be carried out to ensure both sides receive what they are looking for.


Established in 2005, Astreem Consulting is a Singapore based franchise consultancy firm that specialises in helping brands to internationalise through customised growth strategies including franchise development, business matching, branding and business excellence automation. With its proven track record of delivering measurable results and increasing net profit value for its clients, Astreem Consulting ensures that its clients achieve sustainable competitive advantage, build more capable franchise organisations and secure lasting results.

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