How to sell a franchise: concept, documents, commercial offers and tips

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Increasingly, entrepreneurs have begun to open a business with the aim of developing and selling a franchise. And this is not surprising, because such an approach allows you to earn not only on the implementation of any kind of activity, but also to receive a stable income from a lump sum and monthly deductions from the sale of goods and services. However, this type of activity is associated with certain problems and pitfalls that must be taken into account. Let's take a look at how to start a franchise and sell it for maximum profit.

General information

Before we talk about how to start selling franchises, let's first understand the basic concepts. The legislation provides for certain requirements for business owners that must be met.

The main ones are:

1. A franchise agreement can be concluded between legal entities and representatives of private business. In its turnthis means that registration with the tax office is a prerequisite.
2. The creator of the franchise must develop his own trademark and register it as an intellectual property object with the appropriate authority.

Compliance with these conditions is necessary, because otherwise there will be problems with the law.

The benefits 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:

1. Improving business efficiency and generating additional income in the amount of 200,000 rubles per month.
2. The workflow becomes simpler and more understandable, as it is carried out according to the developed algorithm.
3. Much less time is spent on staff training. In just a few months, qualified personnel can be trained.
4. A well-established and established channel to attract potential buyers.
5. Quick breakeven.

It is precisely because of the advantages listed above that franchising is of great interest to business owners. How to properly sell a franchise will be described in detail below.

Prospects

Many aspiring entrepreneurs who do not have much experience face certain difficulties when trying to sellfranchise 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:

1. "Pros" are businessmen who already have their own business, looking for directions for profitable investment of money.
2. "Lucky" - franchisees who are given money to develop the project by we althy parents.
3. "Fans of the brand" - as a rule, regular customers of the company who regularly purchase its products.
4. "Qualified subordinates" - managers of large organizations who want to profitably invest funds.

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 properly “package” your product.

Proposal development

Let's take a closer look at this. So how do you franchise your business? 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 market analysis is indispensable.

The focus is on the following:

1. Assessing the level of competition by region.
2. Efficiency calculationown marketing strategy.
3. Calculation of the necessary financial investments for the development and implementation of the project.
4. Determination of potential profit.

When you have detailed information on hand, you can proceed directly to the preparation of a commercial offer. This process includes the following steps:

1. Development of a route sheet.
2. Creating a signature and easily recognizable style.
3. Designing a franchise network management system.
4. Preparation of all necessary documentation.

So you've "packaged" your project, how to sell a franchise? Next, you start sending out offers to potential customers and running an advertising campaign.

To increase your chances of success, you must give detailed answers to the following questions:

1. What benefits does your offer provide.
2. How much to invest and what will be received in return.
3. What problems may arise in the process of work.

Only by providing comprehensive information about your business, you will be able to interest other businessmen in it and attract them to work together.

What does the franchise package include?

Developing a franchise is a very long and laborious process. You will have to tinker with the preparation of the necessary package of documents, which includes the following:

1. Presentation.
2. Management Manual.
3. Corporate Identity Standards Guide.
4. Detailed financial calculations.
5. Instructions for opening new outlets.
6. 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 smallest details, since the success of the entire enterprise depends on it to a greater extent.

Legal

How to sell a franchise of your company so that there are no problems with the law? This question haunts many aspiring entrepreneurs.

Franchisee can work under the following types of contracts:

• commercial concession;
• affiliate;
• leasing;
• agency;
• client;
• license agreements;
• for paid services.

Most often they work on the first type of contract, however, it will take at least one year to settle 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 have no idea how to sell a franchise, it would be useful to first consult with a lawyer who specializes in this matter. So you can not only avoid many pitfalls, but also save a lot of time, money and nerves.

The document package includes the following:

• the contract itself;
• franchisee work 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 is associated with additional financial costs.

What information should be included in the contract?

Regardless of which document you will work on, it must contain certain conditions on the basis of which the sale of the right to use the trademark will be carried out.

These include the following:

1. Amount of the lump-sum contribution and roy alties, as well as the schedule for their payment.
2. Rights and obligations of both parties.
3. Terms of technical and information support.
4. Territorial restrictions.
5. Terms of using the franchise.
6. Possibility of extension.
7. Circumstances under which the contract may be terminated.
8. 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 make changes to the agreement.

Product promotion

So we actually came to the answer to the question of how to sell a franchise of your business. There are many ways to do this, the main ones arewhich are as follows:

• own site;
• specialized venues;
• 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 clients about your offer, as this will make you more attractive to people and inspire more trust.

What are the nuances to consider?

Let's take a closer look at them. We have already covered in detail how to sell a franchise. But in the process of work, you will constantly encounter various problems. To minimize them, lawyers advise taking into account the following nuances:

1. Trademark registration. This is a mandatory condition, for non-compliance with which there will be a punishment.
2. Filing 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.
3. Tax registration of all intangible objects. This will allow you to realistically assess the value of the company if you later want to sell it.
4. Responsibly approach the execution of all documents. If any errors are found during the verification process, then this can turn into very big problems.

It is worth noting that when concluding a contract you will need a certified copy of the documents, so find a good notary in advance.

Main beginner mistakes

Thisaspect deserves special attention. Is it possible to sell a franchise in our country and make good money at the same time? The answer is yes, but in order to reap the maximum benefit, you need to do everything right.

As practice shows, novice entrepreneurs most often make the following mistakes:

1. A frivolous approach to project planning and calculation of financial indicators.
2. Lack of uniqueness in the commercial offer. There are a huge selection of franchises on the market today, so you need to come up with something original to stand out from the crowd.
3. Too high lump sum and roy alties scaring off potential buyers.
4. Financial calculations during the presentation of the project are not supported by real sales of goods and services.
5. Carrying out activities with an unregistered trademark.
6. Loyal pen alties in relation to the franchisee, for violation of the conditions prescribed in the contract.
7. A frivolous approach to choosing buyers, which could endanger the existence of the entire business.
8. A careless 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 take this seriously. Only in this way will you be able to achieve good results and build your own empire, which will bring a stable income. Do not be afraid to take risks, because if you do nothing, then the result will bezero!