Increasingly, entrepreneurs began to open a business for the subsequent development and sale of franchises. And this is not surprising, because such an approach allows you to earn not only the implementation of any kind of activity, but also to receive a steady income from a lump-sum payment and monthly deductions from the sale of goods and services. However, this type of activity is associated with certain problems and pitfalls, which must be taken into account. Let's figure out how to create a franchise and sell it to get the most out of it.
general information
Before we talk about how to start selling franchises, let's first understand the basic concepts. The legislation provides certain requirements for business owners, which must be followed.
The main ones are the following:
- Franchise acquisition agreements may be concluded between legal entities and private business representatives. In turn, this means that registration with the tax office is a prerequisite.
- The creator of the franchise must develop its own brand and register it as an object of intellectual property in the appropriate body.
Compliance with these conditions is necessary, because otherwise there will be problems with the law.
The advantages of this type of activity
Many individual entrepreneurs are interested in the question of why modern businessmen sell franchises. The introduction of franchising provides many advantages, among which are the following:
- Improving business efficiency and generating additional income of 200,000 rubles per month.
- The workflow becomes simpler and more understandable, since it is carried out according to the developed algorithm.
- A lot less time is spent on staff training. In just a few months you can prepare qualified personnel.
- Well-developed and established channel for attracting potential buyers.
- Quick exit to breakeven.
Thanks to the above advantages, franchising is of great interest to business owners. How to properly sell a franchise will be described in detail below.
Potential clients
Many novice entrepreneurs who do not have much experience experience certain difficulties when trying to sell a franchise in Russia. As practice shows, this is primarily due to the fact that they incorrectly position their product on the market and cannot determine the categories of people who will be interested in it.
Among the main categories of buyers are the following:
- "Profi" - businessmen who already have their own business, looking for directions for profitable investment of money.
- "Lucky" - franchisees who are given money for the development of the project by wealthy parents.
- “Brand fans” are usually regular customers of a company who regularly purchase its products.
- "Qualified subordinates" - managers of large organizations who want to invest financially profitably.
When answering the question of how to sell a franchise, it is worth noting that, first of all, it is important to identify potential customers who will be interested in it, in order to subsequently competently “pack” their product.
Commercial offer development
Let's dwell on this in more detail. So how to sell your business franchise? In order to interest buyers, it is necessary to develop a detailed description of the proposal with calculations of financial indicators, as well as develop an algorithm by which the project will operate. But here, a thorough analysis of the market is indispensable.
The focus is on the following:
- Assessment of the level of competition by region.
- Miscalculation of the effectiveness of your own marketing strategy.
- Calculation of the necessary financial investments for the development and implementation of the project.
- Definition of potential profit.
When you have detailed information on hand, you can proceed directly to the preparation of a commercial proposal. This process includes the following steps:
- Development of a route sheet.
- Creation of a corporate and easily recognizable style.
- Designing a franchise network management system.
- Preparation of all necessary documentation.
So, you have “packaged” your project, how to sell a franchise? Next, you start sending out offers to potential customers and conducting an advertising campaign.
To increase the chances of success, you should give detailed answers to the following questions:
- What benefits does your offer provide?
- How much to invest and what will be received in return.
- What problems may arise during the work.
Only by providing comprehensive information about your business, you will be able to interest other businessmen and attract them to work together.
What does a franchise package include?
Franchise development is a very long and laborious process. You will have to pretty mess with the preparation of the necessary package of documents, which includes the following:
- Presentation.
- Management Guide.
- Guide to corporate identity standards.
- Detailed financial calculations.
- Instructions for opening new points.
- Description of the concept and attributes of the brand, target audience and market positioning conditions.
The development of a franchise package should be approached very seriously, not neglecting even the little things, since it is to him that the success of the entire enterprise depends to a greater extent.
Legal Aspects
How to sell a franchise of your company so that there are no problems with the law? This question haunts many aspiring entrepreneurs.
Franchisees can work on the following types of contracts:
- commercial concession;
- partnership;
- leasing;
- agent
- client
- license agreements;
- on a fee-based provision of services.
Most often they work according to the first type of agreement, however, it will take at least one year to resolve all legal formalities. In addition, it will take another couple of months to register a trademark with Rospatent. This procedure is mandatory, since it is prohibited by law to sell franchises without a company logo.
Required documents
If you do not have the slightest idea about how to sell a franchise, then it would be worthwhile to consult with a lawyer specializing in this matter. So you can not only avoid many pitfalls, but also save a lot of time, money and nerves.
The package of documents includes the following:
- the contract itself;
- franchisee rules;
- business standards;
- documents that will facilitate the process of selling goods.
You can do everything yourself, as well as use the services of lawyers. The second option is more preferable, but it involves additional financial costs.
What information should be indicated in the contract?
Regardless of which document you will work on, certain conditions must be prescribed in it, on the basis of which the sale of the right to use the trademark will be carried out.
These include the following:
- The size of the lump-sum contribution and royalties, as well as the schedule for their payment.
- Rights and obligations of both parties.
- Terms of technical and information support.
- Territorial restrictions.
- Franchise Terms of Use.
- The possibility of prolongation.
- Circumstances in which the contract may be terminated.
- Terms of supply of raw materials and equipment.
It is worth noting that potential buyers may wish to make any changes to the terms of cooperation, so you may need to amend the agreement.
Product Promotion
So we actually came to the answer to the question of how to sell the franchise of our business. Many methods are available for this, the main ones being the following:
- own site;
- specialized sites;
- social networks;
- forums.
It is worth noting that it is best to use several channels to attract potential buyers at once. In addition, do not neglect business meetings where you can personally tell customers about your proposal, as this will help you to have more people and arouse more confidence.
What nuances should be considered?
Let's take a closer look at them. We have already examined in detail how to sell a franchise. But in the process, you will constantly encounter various problems. To minimize them, lawyers advise you to take into account the following nuances:
- Registration of a trademark. This is a prerequisite for non-compliance which will be punished.
- Registration of a patent for unique technologies and developments. If it does not exist, then even after the termination of the contract, other people will be able to use your product.
- Tax registration of all intangible objects. This will allow you to really assess the value of the company if you want to sell it in the future.
- Responsibly approach the execution of all documents. If during the verification process any errors are found, this can turn into very big problems.
It is worth noting that at the conclusion of the contract you will need a certified copy of the documents, so find a good notary in advance.
Basic mistakes of beginners
This aspect should be given special attention. Is it possible to sell a franchise in our country and still make good money? The answer is yes, but in order to maximize the benefits, you need to do everything right.
As practice shows, novice entrepreneurs most often make the following mistakes:
- A frivolous approach to project planning and calculation of financial indicators.
- Lack of uniqueness in the commercial offer. Today, the market has a huge selection of franchises, so you have to come up with something original to stand out against the general background.
- Too high lump-sum payment and royalties, scaring potential buyers.
- Financial calculations during the presentation of the project are not supported by real indicators of sales of goods and services.
- Carrying out activities with an unregistered trademark.
- Loyal penalties in relation to the franchisee, for their violation of the conditions prescribed in the contract.
- A frivolous approach to the choice of buyers, which could jeopardize the existence of the entire business.
- A negligent approach to fulfilling one’s obligations, as a result of which the trust of customers is greatly reduced.
If you decide to start your own business and sell franchises in the future, then you need to be serious about this. Only in this way can you achieve good results and build your own empire, which will bring a steady income. Do not be afraid to take risks, because if you do nothing, then the result will be zero!