Most companies are today considering franchising more than most did barely a decade ago. Typically, that is because of the increase in the number of competitor businesses in the same niche. Thanks to advancements in technology, you now have the resources to reach to markets in distant locations with ease. The adoption of paperless money and e-commerce, you now can transact your business in the comfort of your office. You have now established your brand image, and your customers are becoming more loyal than before. But the type of business model that you have been using does not seem to allow you to flex into the promising flourishing of your company.
So, the one solution that you have left here has long been franchising. You have heard and learned a lot about that, and now seems the best time to establish that franchise system. You have approached your lawyer for legal agreements and begun offering franchising opportunities. And that right there is where the whole problem begins; you started the franchise development process from the end. The legal franchise documents should not be your ultimate guide to structuring your franchise system.
A lot is wrong with starting with legal franchise documents. As a prospective franchisor, you probably do not have the experience to read between the legal jargon for the franchise industry. Most of the legal questions that your lawyer will use have frames of reference that are independent of how you have been running your business. So, ideally, all that these franchise documents will offer you will be advice and the legal direction to take. You need the exclusive benefit of the capacity to evaluate your business alternatives for the highest returns. That should cover conducting the necessary research and exploring strategies with minimal risks. Until then, the legal franchising documents will remain more of legal vehicles than the structures. And that can easily turn into a tool that works against your plan to expand your business.
Minding Your Business’ Future
There are many risks with starting your franchising process with legal documents. The major one here is that new franchisors will restrict their business to the confines of the law. That in turn, will reconfigure your business to discouraging innovation and talent growth. These two are very critical to the success of every business irrespective of its mother industry. So, do not allow legal agreements to take the lead here. Any risks that you take will extend to your business, its stakeholders and future franchisees.
Conclusion: The Law Could Be Your Downfall
Do not get that wrong. The element of the law is very critical in developing franchise systems. But, ideally, it is quite minor to be the sole foundation on which you will manage your future franchise business. Using legal franchising documents to direct your company will limit you in how your franchisees grow your business. And, that, unless you will have a fallback strategy, your business will hardly measure up to the success that you had in mind. If you do not know exactly where to begin, seek help from an experienced provider of franchise development services.