How Can I Franchise My Bookkeeping Business?
Written by Ben Robinson
Position
It can be difficult to scale a bookkeeping business because they usually are solitary endeavors that require a lot of attention to detail. With franchising, though, it is possible to take your bookkeeping business to new heights!
What Does It Mean To Franchise My Business?
Franchising a business is a form of expansion. It entails training other organizations to behave like your business, upholding the same values and professional standards. It also entails granting permission for those organizations to use your business’s branding. The result is a fleet of offices that are branches of your original bookkeeping company for all intents and purposes.
In exchange for all this, you get a cut of the profits from your franchisee locations.
Why Should I Franchise My Business?
There are many reasons why owners choose to franchise their businesses.
Profitability
You get money from your franchises for doing very little besides the initial setup.
Risk Mitigation
Since the franchises are not all reliant on the same pool of money to keep them afloat, one location failing does not have much of an effect on the others.
Higher Valuation
When an investor sees a franchise, they are instantly willing to invest more than any other business type. If you’re planning to sell your business in the future, franchising will prove very lucrative.
Division of Labor
When you franchise your business, you are not responsible for supervising the entire company. Instead, the manager at each location will take care of their own staff.
Motivated Management
Many small businesses (especially bookkeeping businesses) have trouble growing because the owners cannot trust the managers they hire. In franchised businesses, the other managers are generally reliable and diligent because they still own their business branches.
When Is The Right Time To Franchise My Business?
It would be best if you only franchised your business when you find yourself needing to expand. It would help if you also had a very clear plan about what you want to accomplish and how you will do it. I’ve seen more than a few companies make the franchising mistake purely as a means to make a few extra bucks, and it has almost always backfired spectacularly.
The step-by-step guide below will help you determine how you need to prepare for franchising your bookkeeping business.
How I Can Franchise My Business -- 7 Steps
Hire an Attorney
Before you proceed, hire an attorney who is familiar with franchise law. It will help the process run more smoothly.
Prepare My FDD
The FDD (franchise disclosure document) is a long paper detailing precisely what your franchisees will need to do to be in compliance with your company on a business level. You don’t technically need the FDD until you actually start onboarding franchisees, but it’s a good idea to draw one up sooner rather than later so you have a good game plan moving forward.
Here is a sample FDD to give you an idea of what you’ll need to produce
Protect My IP
Take stock of your business’s intellectual property (IP) and start protecting it! You’ll need to get in touch with the US Patent and Trademarks office to ensure all of your unique names, slogans, and logos are proprietary.
Franchise My Business
Now you need to establish a franchisor business entity. Note that the franchisor will be a separate entity entirely from your business. This can get pretty sticky, and you’ll probably have to lean heavily on your attorney for this step.
You’ll also need to set up a bank account for your franchise (mainly for your franchisees to pay part of their profits into).
After incorporating your franchisor, you’ll have to fill out state-specific forms that allow you to sell there, by registering your franchise.
Create My Guidelines
Time to put together a manual for your franchise location owners. It must contain everything you need them to know about your business and how they can replicate it at their location. Include any and all regulations, policies, trade secrets, training information, and core values that you want them to keep in mind.
Select My Franchisees
Now that you have all the preparation in place, go out and find the locations you want to convert into your franchisees. There’s a strategic art to choosing the right locations, and it can definitely make or break your franchise.
Support My Franchisees + QA
Now that you have all the preparation in place, go out and find the locations you want to convert into your franchisees. There’s a strategic art to choosing the right locations, and it can definitely make or break your franchise.
IF YOU’RE A FRANCHISE OWNER, I’D LIKE TO HEAR WHAT YOU WISH YOU KNEW FROM THE START THAT ISN’T EXPRESSED IN THIS GUIDE! LET ME KNOW ON THE BOOKKEEPERS FACEBOOK!
Up Next:
