What Are the Stages of the Franchise Development Process?

The stages of the franchise development process should ideally be customized to meet each unique business’s needs, but in general, will include the following: 

1. Partnering with a franchise development partner
2. Conducting a brand evaluation
3. Developing a franchise model
4. Filing franchise paperwork
5. Preparing marketing materials
6. Presenting the franchise to brokers
7. Onboarding, training, and supporting franchisees 

In this blog post, we are going to discuss each step in the franchise development process and what you need to be conscious of when choosing the right partner and going through the process. 

1. Partner With an Experienced Franchise Development Partner

The stages of the franchise process can be complex. But the more prepared we are, the better we can ensure a seamless franchise launch and franchisee onboarding process.

Trying to launch and/or expand your franchise alone is not advisable, particularly if you’ve never expanded a company into a franchise before. Instead, partner with an experienced franchise development partner, such as Pinnacle Franchise Development. 

An experienced franchise development partner can help you illuminate your vision and implement a strategy that works. They will keep you feeling informed about the steps in the process and will ensure your desires and needs are being met. 

2. Evaluate Your Brand and Look for Opportunities

Once you’ve partnered with an experienced franchise development partner, the next step is to conduct a feasibility study.

Since you have an established business, you already know what’s possible in your current location. You know your local market well, but franchising a business requires the capacity to expand and apply your business model to many different territories. An experienced partner will answer questions like:

• Will the market demand hold up? 
• Will customers in other territories respond well to your brand? 
• Is it possible to apply your business model to multiple locations or does it require some adjustments?

During this investigation stage, you’ll get a sense of what’s possible. It’s also a chance to look for more opportunities to elevate your brand, such as by connecting with new vendors or improving your current marketing efforts.

3. Develop a Solid Franchise Model

The investigation stage of franchise development naturally leads into the franchise model development stage. Here, you’ll need to figure out issues such as franchisee eligibility requirements, fees, royalty percentages, sources of equipment needed for franchises, and key performance indicators (KPIs) to determine minimum franchise performance parameters. 

1. Franchisee Selection: Establishing franchisee eligibility requirements allows the franchisor to attract and select candidates who have the necessary skills, experience, and resources to successfully operate a franchise unit. 

2. Financial Considerations: Determining fees and royalty percentages helps the franchisor establish a fair and sustainable financial structure. It ensures that franchisees understand their financial obligations and allows the franchisor to generate revenue while providing ongoing support and maintaining brand standards.

3. Equipment and Supply Sources: Identifying reliable and approved equipment sources for franchises ensures consistency in product quality and operations across all franchise units. It helps maintain brand standards and facilitates efficient procurement for franchisees, minimizing potential operational disruptions.

4. Performance Measurement: Establishing KPIs is crucial for monitoring and evaluating the performance of franchise units. KPIs provide benchmarks for franchisees to strive for and enable the franchisor to assess the overall health and success of the franchise network. By setting minimum performance parameters, the franchisor can ensure that franchisees meet certain standards and contribute positively to the brand’s reputation.

Addressing these aspects is vital for maintaining consistency, quality, and long-term success within the franchise network. It establishes a solid foundation for franchise operations, promotes brand integrity, and supports the franchisees in achieving their business goals.

4. File the Appropriate Paperwork

In order to operate a franchise, you’ll need to register as such with the Federal Trade Commission (FTC). Depending on where you’re located, you may also need to register with your state. 

Important note: every franchise location in a different state will require this registration process.

5. Prepare Sales and Marketing Strategies and Materials

You need to present your brand in the best possible light, both when recruiting potential franchisees and when marketing the brand to the end consumers. To do this, you need to develop a comprehensive marketing strategy for your franchise. This includes developing brand style guidelines and all marketing materials like: 

• Social media advertising 
• Influencer marketing
• Website content 
• Landing pages
• Billboard and print advertising

All marketing materials should be a result of an overall marketing strategy. Developing one-off tactics is almost never a good idea. It leads to inconsistency and confusion for your audience. An experienced franchise development partner will ensure your marketing materials are all working toward a greater goal. 

6. Present Your Franchise to Brokers

When all preparations are complete, it’s time to present your brand to franchise brokers. Franchise brokers are professionals who can connect your brand to potential franchisees who meet your eligibility requirements. While partnering with franchise brokers is not a requirement, they offer a higher quality candidate than digital marketing efforts alone.

All of the hard work you and your franchise development partner have done up to this point will prepare you to present your brand in the best light possible. Brokers want to see that you have a strong strategy backed by the support needed to be successful. 

Pro tip: Results are everything. Including customer testimonials and third-party reviews will be critical for proving your value. Someone else validating your brand will always have a stronger impact than you talking about your brand. 

7. Onboard, Train, and Support Your Franchisees

Finally, you can prepare to grow your franchise by onboarding and training your selected franchisees. This may occur at your headquarters or at the franchisees’ new premises (or a hybrid). 

It’s important to realize that training is ongoing. Your franchisees will need continued support to build a successful franchise. This empowers them with opportunities to ask questions, address problems, and innovate new solutions. 

Grow Your Franchise With Pinnacle: Get a Free Consultation

When you’re ready to begin development efforts for your business, turn to the franchise development services that business owners have been trusting since 2015. 

With more than 40 years of combined experience, the professionals at Pinnacle Franchise Development can strategically apply our time-tested franchise process in a way that’s customized to your unique business. Contact us today to request a free consultation.