How to sell a franchise - instructions for pre-sale preparation and finding buyers
To stay afloat, you need to move forward. All successful businessmen know this. One way to expand your own business is to create a franchise. By passing on the acquired experience to others, you remain the owner of the enterprise, develop new markets and receive remuneration. How to sell a franchise, what is needed for this and what costs await the future franchisor?
Benefits of franchising
That's what it is - selling a franchise: you share your right to use your trademark with the buyer, and in return receive income in the form of a lump sum and monthly royalties.
Compared to opening your own branches, the franchise has a number of. Investments will be required to create a network. Most likely, you will have to look for, convince investors of the expediency of each of your actions and listen to their precious advice.
Well, the franchise seller is a person who himself gives advice and monitors their strict execution, receiving additional income. The funds received can be invested in the training of new franchisees. And they, in turn, will provide you with a rapid expansion into new markets. In addition, you remain the full owner of the business without losing control over it.
Sales preparation
Before you go into franchising and start selling franchises, evaluate how your business is suitable for this. Answer these questions for yourself:
- Is your business operating efficiently?
- whether it will be easy for you to describe the main processes;
- will you be able to teach your business to other people within two to three months;
- whether your company is recognizable (presence of a brand).
If there are positive answers, you can start preparing for the sale.
How to start selling a franchise? Conventionally, the whole process can be divided into three components:
- legal preparation;
- development of instructions and conditions for the franchisee;
- franchise promotion.
It is also necessary to secure your rights to the brand: the name, technologies that distinguish your business from many others must be patented in Rospatent. 
Legal side
The sale of franchises in Russia is regulated. It is in it that the presence and size of the initial payment is prescribed - a lump-sum fee, and monthly royalties.
The agreement establishes further mutual responsibility between the partners.
The franchisor must accompany the franchisee at the initial stage, conduct training and be available for consultation on any issue.
And the franchisee, in turn, must adhere to the instructions of the patron. In case of non-fulfillment of obligations by the parties, the possibility of terminating the contract should be provided.
The owner must consider how to sell the franchise of his business seriously and for a long time, so that partners remain in your network, and do not go to their own - similar - business, having gained the necessary knowledge and experience.
Special conditions may also be agreed, for example, whether it is possible to resell the franchise to a third party, whether the owner will supply goods and equipment, in what territory the agreement is valid.
Guidelines and standards
One of the costs for someone who sells a franchise will be the development of a guide for the franchisee. It should contain standards: a detailed description of the business, manufacturing techniques and customer service levels, as well as instructions describing how to achieve these standards.
The difficulty in compiling such a textbook is that the entrepreneur must analyze his own actions in retrospect and leave only those steps that led him to success. 
Therefore, the owners of a ready-made business come to the aid of specialists in the "packaging" of franchises. They will create a clear algorithm, thanks to which it will be possible to copy a business by simply repeating certain actions.
Promotion
Finally, you need to prepare to promote your product. Selling franchises and ready-made businesses is a separate activity that requires both time and money. Calculate what will be more profitable for you: expand the staff by forming a special department that develops presentations, or contact an advertising agency.
Finding Clients
Now about where to sell the franchise. Having a ready-made offer in hand, the entrepreneur is ready to demonstrate it to potential buyers. Usually, interested parties are willing to study special catalogs of franchises posted on the Internet. However, not all successful firms are registered in them; the opposite is also true - the presence of a franchise in the catalog is not a guarantee of the franchisor's liability. Therefore, just posting information on such a site will not be enough.
One of the indicators of the success of the enterprise is the presence of its own website. A well-designed website on the Internet will tell about your business not only to customers, but also to potential franchisees.
Before selling a franchise, responsible owners readily provide interested parties with the contact details of already working partners. Such communication is productive, first of all, for future franchisees. They will be able to learn about the project in advance, understand why this business is not suitable for them, or vice versa, will be confirmed in their decision to make a deal with you.
You can ask for help from specialists - franchise brokers who know how to properly sell a franchise, and can help you both in campaigning and in negotiations with potential buyers. 
Customer rating
How to sell a franchise and not harm the brand's reputation? It is in the interests of the owner to conclude contracts only with responsible and serious partners. Therefore, everyone who wants to purchase a franchise must provide you with information about himself, for example, in the form of a completed questionnaire. And you will have to decide whether he can be trusted to work under your brand.
High-profile firms solve this problem by charging the franchisee a hefty down payment. However, for newcomers to the market, this selection method may not be suitable. On the contrary, at first it is more expedient to reduce the amount of the lump sum, provide an installment plan, or sell the franchise for a percentage of the expected profit. A partner will be able to start a business on favorable terms, and you will be able to test your work in practice.
After signing the contract
When all issues are resolved, you can sign the contract. But, of course, the process does not end there. After all, the profitability of a new enterprise and the number of people who want to repeat this experience will depend on the quality of your support.
As a rule, the patron helps to select and rent a suitable business premises, equip it, and arrange the supply of goods. But most importantly, it provides training for the partner in all the subtleties of the business. Whether you will do this personally or you will have a special support department depends on the type of activity and the size of the enterprise.
How to choose a profitable franchise: Video
You have developed a successful and attractive business that everyone would like to run. With franchising, not everything is so simple: selling a franchise is a whole science. The business itself becomes a commodity on the market, for which you need to find a client and convince him that the product suits him. Learn how to franchise your business in our article.
Sales preparation
In recent years, franchising has become a popular and mature phenomenon. This is a great option for start-up entrepreneurs, as the franchisor offers them a start-up base and assistance, as well as other associated opportunities: reputation, less liability, and more. In general, “easy” money to receive. The franchisee can only maintain the brand image, and obey the "big brother" in everything. Thus, the franchisor will not only receive additional sources of income, but also expand the network, extending its influence to regions whose specifics are well known to local start-up entrepreneurs.
Any company wants to have many branches and their profits, but managing them is difficult. Franchising reduces the load on the main office without loss of quality due to the risks that the franchisee bears.
Franchising reduces the load on the main office without loss of quality due to the risks that the franchisee bears.
The technology of selling a franchise begins with the decision to create a franchise. Not every business can afford this amount of resource usage. First you need to evaluate:
- Company status. It must really work and make a profit.
- Ease of standardization. Is it enough to simply systematize the work of the company and implement its standards in another company.
- The speed of learning the system of work (training should not require more than three months).
- Readiness of the contact base for expansion of activities. You have formed work with specific suppliers, advertising strategies, a well-chosen assortment, and the like.
- Brand. It is easier for franchisees to agree to cooperate with a reputable and familiar name in the market.
If the system of your company's work is still far from ideal, put aside large-scale plans and work on its development. A franchise is a successful business model that has a chance to survive even when the franchisee makes mistakes. If the original is not perfect, then the copies will not be able to develop into a profitable business and bring income to the partner.
Forming an offer
The next step is research. Remember that you will not only need to work with the "parent" company so that its development does not stop, but also look after the franchise network. Study possible competitors, paying particular attention to market leaders, their experience and features of work. This way you will get a complete picture of the industry and understand how to stand out. Then create a franchise model by planning the financial turnover. Consider income and expenses, profitability, payback time, necessary funds for development. You need to understand if your business is strong enough to withstand major changes.
The key departments that are necessary for the development of franchising are the sales department and the support department (business consulting). Since a franchise is a commodity, it must be made attractive and colorful in order to be sold. The quality work of the support department, which will support the life support of the system, will convince the franchisee.
Creating a franchise will require investments, so with the first sales you will go into the red. It is necessary to prepare enough resources for this period and be sure that the company will be able to maintain its position.
The economic model should also reflect the possibilities of supporting franchises - primarily development assistance and control. This is also where you predict whether, with the help of the support department, you will be able to monitor compliance with company standards and the loyalty of franchisees who may well eventually go out of business using your model. Large companies are implementing entire systems to protect the system from copying.
If, as a result of the research, you received positive forecasts for your franchise, you can begin to turn it into a commodity and. Its attractiveness often compensates for many of the shortcomings of the project, such as slow payback. Sometimes, in order for a franchise to become desirable, beautiful packaging and eye-pleasing statistics are enough. In addition, the more original the idea, the more young entrepreneurs will respond to it.
Franchise promotion
You will need an advertising strategy, tools and a clear understanding of the target audience. And it will be made up mainly by novice entrepreneurs who are attracted by greenhouse working conditions. The rest of the audience are entrepreneurs with experience who see such a company as a way to earn extra money. To promote the franchise among your target audience, use the following channels:
- Industry exhibitions. Option for finding experienced entrepreneurs. You can present your business or just advertise, in any case, it is better to be there in person and chat with potential customers live. They are less likely to be tempted by packaging and ask more questions about franchise business processes.
- especially important for influencing newcomers, as they get most of their information from social media. This includes not only the promotion of the group, but also advertising in thematic communities.
- Franchise website promotion. Here, special attention should be paid to SEO.
- Placement of information in franchise catalogs and on thematic Internet resources.
- , for example, with training centers or business schools. So the audience will receive information about the franchise personally from experts.
Refine your advertising offer depending on the audience and region you are targeting. This will not require a lot of resources, but such personalization will attract more customers. The next step will be the sales department. Its specialists themselves must attract franchisees, for example, through active sales and cold calls. Their main goal is to bring customers who are interested and contacted the company to a purchase.
Buying a franchise is a responsible step for the franchisee, which is not comparable in duration to the purchase of a jacket or even a phone. The client will doubt, weigh, study and consult for a long time. All this time, your company should always be there to help with the decision and provide information support. Often the problems are related to money. In this case, it is worth considering promotions, special offers, programs related to grants, subsidies or installments. You can also consider selling a franchise without a lump-sum fee (but remember that this is risky).
Franchisee's Choice
The good thing about selling a franchise is that the seller can choose the buyer (not just the other way around). Interviewing a potential client is a natural occurrence, because you need to make sure that the person who is supposed to contribute to the development of the brand's reputation does not lose face and does not let you down. During the interview, be guided by the intuition of the entrepreneur and a pre-compiled portrait of the ideal franchisee. Find out if the client is regular enough, because buying a franchise is a long-term cooperation. It will be a shame to spend so much time and effort on a person who will get tired of business in six months. But an ambitious and ambitious franchisee can let you down by ignoring business rules and standards or even trying to steal an idea.
An ambitious and ambitious franchisee can let you down by ignoring business rules and standards or even trying to steal an idea.
Consider the characteristics of the audience: the experience of a novice entrepreneur does not inspire confidence, such buyers bribe with inexhaustible enthusiasm. But sooner or later, disagreements, discontent and anxiety can arise that will suck all the energy out of a beginner. Therefore, at an interview with experienced entrepreneurs, the decisive factor is just the experience of managerial work. Study information about the client's previous business or place of work, using open sources and feedback from business partners.
If the franchisee is going to develop a business in a region unfamiliar to you, explore its potential. At the interview, it is worth clarifying the financial issue: like enthusiasm, money can run out during a difficult period, and then you will have to deal with problems. So, the difficulties are stipulated, it remains only to sell the franchise to a reliable person and boldly develop the business. Then you will surely have a system of successful work on the principles of franchising.
I will not dissemble - franchising is another way to make money for those who already have an existing and successful business. Franchising in this case is an additional source of income. However, this source of income requires additional investment. The point here is not so much in creating a franchise package and, as it is now fashionable to say, in “packaging” a business into a franchise, but in creating a separate sales and support department franchise partners.
Naturally, when launching a franchise business, the owner himself is often both the sales department and the support department rolled into one. However, as the network grows, a large number of existing and potential partners appear, it is necessary to systematize and delegate work. You will not be able to let the development of the franchise network go by itself - you will either have problems attracting partners, or difficulties will arise in further relationships. Until litigation. But future franchisors, as a rule, do not think about these difficulties ... for the time being.
As a rule, the start of franchise sales starts easily - the first franchisees come by themselves, especially if the business is new, offers a unique product or service, or has a well-known name and brand. However, the rapid interest and active growth is gradually decreasing - this is inevitable. This means that sales and growth rates begin to fall.
Usually, at this point, most franchise owners begin to actively search for channels to promote franchises. And of course, the first thing they turn to specialized Internet resources, accumulating a potential audience of possible franchisees.
However, even the placement of information about the franchise and the announcement of a turnkey business in franchise catalogs does not guarantee stable demand. Listing the franchise in the catalog is only the first step, but it is far from the only one. In order for such platforms to be effective, and requests to turn into discoveries, it is necessary to choose multifunctional and technically and professionally advanced aggregators and services that can facilitate the work of the franchise sales department, and sometimes even optimize it.
BIBOSS follows the path of optimizing and automating the process of selling franchises.
We can say that BIBOSS to some extent even replaces the sales department or at least helps to reduce the budget for its maintenance, allowing you to keep only professionals who do work that cannot be automated. For example, only a professional franchise manager can negotiate on the merits, determine whether a potential franchise buyer will be a successful and reliable franchise partner in the future.
At the same time, the franchise seller needs not only to bring the client to the conclusion of the transaction - the signing of the contract, but also to determine whether it is worth bringing each individual potential franchisee to this stage. The conclusion of the deal - the signing of the contract - is only the successful completion of the first stage. Then the most interesting begins ... However, today we are not talking about this, so let's get back to sales, or rather, to the processes that precede them.
It will not be about the stage of negotiations with potential franchisees, and not even about the methods of processing incoming applications. We will talk about those processes that occur BEFORE the receipt of an application for the purchase of a franchise. Moreover, if you think that the work of the franchise sales department begins precisely from the moment an application is received, you are deeply mistaken.
You can easily set up your sales team in such a way that it will only process those applications that will lead to discoveries, without wasting time on empty conversations and negotiations with leads who are not interested in your offer.
It is on the system of collecting hot applications, applications-openings that BIBOSS has been working for over 10 years.
What is the BIBOSS system based on?
Before talking about a system that allows you to optimize the process of selling a franchise, I propose to understand what kind of people decide to buy a franchise, and how they approach the choice of a particular franchise.
Working with "beginners": pros, cons, methods
As a rule, novice entrepreneurs who do not have significant business experience (in the worst case, have no experience at all, either in business or in life) are interested in franchises. This shortcoming is filled with a great desire to work for yourself and the dream of starting your own business. Burning eyes and enthusiasm- traits characteristic of potential franchisees, which, nevertheless, must be feared.
Enthusiasm is, of course, a laudable and necessary thing, but it tends to end and dry up at the most inopportune moment - when problems, difficulties, disagreements or discontent arise. Therefore, the franchise sales department faces an almost fantastic task - to determine during negotiations whether the potential partner has enough enthusiasm to survive all the difficulties and possible problems when starting a franchise business.
The lack of experience will affect in the future, after the conclusion of the transaction - "newbies" in business will attack the personal manager with questions that a more experienced entrepreneur would consider stupid. Nevertheless, when buying a franchise, aspiring entrepreneurs count on comprehensive assistance and advice on any issues here and now.
In addition, start-up entrepreneurs are in limbo- they do not know what business to open, and therefore they are studying completely different offers from different business areas. Today they are sure that the franchise of kindergartens is the key to success, tomorrow - that opening a clothing store under a well-known brand is their chance to become an independent businessman, etc.
In order to attract this category of potential partners, first of all, you need to convince them of the prospects of the business that you offer them, and then describe in detail in what areas you can provide them with competent support and advice.
People are lazy by nature, which means that the more help you provide, especially free (included in the cost of the franchise), the more willing the potential franchisee will be to become your partner. However, you should not go too far with promises and free consultations and materials - business is business, and a relaxed entrepreneur who was given a business on a blue border, most likely, will not be able to hold out in the market and work autonomously and independently. Therefore, when placing a franchise in catalogs, the description should indicate what your partner has to do directly, put forward requirements or outline the terms of reference.
We influence visuals, audials and... digitals
It is better to see once than hear a hundred times - this is what most of the inhabitants of this country are guided by. Even if you list your franchise in all sorts of directories and profile sites, if you do not provide a description with photographs, people will not believe you.
Photos are a kind of evidence of the existence of you, your company, your business and everything that you write and talk about.
The same goes for video. In this case, you will already be able to influence the audience, convincing them of the profitability and success of the enterprise - buying a franchise.
Photos, presentations and videos seemingly additional and unimportant details that have nothing to do with business as such. However, they still give their effect. Firstly, the very fact that the company holds a special photo shoot and allocates a budget for shooting a video about its franchise non-verbally, on a subconscious level, inspires trust and respect for the company itself, which naturally translates into a franchise offer.
Secondly, both photos and videos attract attention and are remembered. And even if the person who viewed your photos, presentation or video did not decide to buy a franchise for one reason or another, then it is quite possible that visual images will pop up in memory at the right time - when talking with acquaintances or friends. So information about you and your franchise is distributed free of charge.
However, any entrepreneur, starting or acting, is to some extent digital, because the purpose of business is to make a profit. It is impossible to make a profit without a slender and clear financial model. Business is a strict sequence of actions that leads to profit. However, in order to put this sequence into operation, financial injections are needed.
The question of finance it is also necessary to clarify immediately, without hiding or withholding from a potential partner, the required amount of investments, the amount of the lump-sum contribution and royalties, as well as notify about all kinds of mandatory and additional payments. Thus, you can immediately weed out entrepreneurs who do not have the necessary amount of free cash and do not waste time on empty negotiations with rogues.
The more transparent the financial model of the franchise looks like, the more trust you will inspire in a potential partner. Yes, by submitting a complete and comprehensive business plan for starting your franchise business, you may encounter competitors who take advantage of your business plan and open their own business without your help, on their own. However, then the question arises not about the effectiveness of placing a business plan in free access, but about as a franchise. If an entrepreneur can easily and easily open a business on his own and sees no reason to buy a franchise, most likely the point is not that you have opened the data of your business, but that there are no visible benefits in cooperation with you. And if a potential partner does not see the benefits, then you didn’t talk about them or didn’t do it well enough.
Check for lice
However, do not think that only the outer shell (description, photographs, and even a business plan) will help you get potential partners in the competition with other franchises.
Both experienced entrepreneurs and more advanced “newbies” are interested in franchises, who approach choosing a franchise and starting a business with caution, analyzing and comparing. The main thing for this category of potential customers is to prove their reliability. And since a large, if not the main, part of the negotiations takes place remotely - by phone, to do this in terms of empty words is not the best tactic. Another thing is if your reliability is confirmed by authoritative sources, for example,
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In this section, BizRating has collected answers to the most frequently asked questions regarding the purchase and sale of a ready-made business.
Finding a business or franchise
In his new article, Ruslan Gadelyanov answers the question of whether it is possible to sell franchises without having a single open outlet. How will the buyer look at it? What should you pay attention to when choosing a franchise if you want to become a partner? Read below.
I will answer right away: this is how it works!
This model is suitable for "light" business (retail trade, provision of services), but is not suitable for large-scale and manufacturing companies.
A good example of a franchise is McDonald's. Demanded product, excellent support department, colossal marketing support. They sell the franchise only to worthy and strong partners, whom they choose themselves.
So, selling a franchise of a non-existent own working outlet is quite realistic. Any business is a copy of a successful business. If you copied the business, changed the name, then this model can be franchised. But keep in mind that selling such a franchise will be more difficult than a working model with an open outlet.
Let's see what the management company (MC) should pay attention to when selling their franchise:
Business must be interesting;
The business must be profitable;
Beautiful packaging;
Quality support.
What potential partners should pay attention to when buying a franchise:
Is the business suitable for the interests;
Does the profitability meet your expectations;
Marketing;
Quality support;
Entrepreneur experience.
As I said, I have worked in many areas of franchising - packaging, selling, accompanying, registering a trademark, helping with logistics, advising on legal and accounting issues, marketing and much more. Based on my experience, I believe that there is a clear line between markets - retail, wholesale, and franchising. Entrepreneurs tend to have certain abilities in their field. And I think that's how it should be: it's hard to become a good accountant and be in charge at the same time. Therefore, the scheme proposed by me will work in practice. I will show you how to do this with an example.
Own example
I recently started packing two businesses. These businesses are not new to the market, I copied from existing business models that have already proven themselves. They are actually workers and bring profit to the management company and partners. But I know that they have problems with the escort department. Without thinking for a long time, I realized that it is possible to build a franchise network according to their model, but with good support.