Franchising Checklist

The route to franchising requires diligence and a strong attention to detail. The following list is a snapshot—listed in no particular order—of critical pieces you must assemble on your path to becoming a successful franchisor.

• Develop a strong leadership and professional advisory team.
• Secure proper capitalization. See these general guidelines.
• Develop a timeline to franchise your business. See these general guidelines.
• Develop systems that allow for support and quality control and effective communication system.
• Document all business processes, procedures, and protocols in a well written Franchise Operations Manual.
• Write a business plan outline including a one-year and five-year outlook, revisiting it every year and then again at five years; include an exit strategy if applicable.
• Create an in-house compliance department that ensures acknowledgement and compliance with applicable registration and disclosure laws.
• Join the International Franchise Association.
• Register the franchise with the SBA (Small Business Administration).
• Know the mission, core values, and vision of the company.
• Develop and define royalty payments and reporting requirements.
• Register your trademarks.
• Develop a training and orientation program for new franchisees.
• Define and create strong territories.
• Develop a public relations strategy.
• Establish relationships with key vendors.
• Develop a potential franchisee screening documentation.
• Draft your Franchise Disclosure Document (or FDD); this used to be called the uniform franchise offering circulars (or UFOC).
• Draft a Franchise Agreement that protects both the interests of you the franchisor and the franchisee.
• Evaluate applicable markets for over-saturation.
• Develop stringent recruitment and selection criteria.
• Find quality legal counsel.
• Build strong relationships with franchisees.
• Ask franchisees as many questions as you need to during the due diligence process.
• Develop mechanisms for evaluating the key business measurements for the company and the franchisees.