21 Ways to Create A New Franchise

21 Ways to Create A New Franchise

Want to create your own franchise brand? Ardy Farokhirad, owner of Krave Kobe Burger Grill, & brand strategist Gina Mims show you how

It may seem easy and a lot of fun to create your own concept with the intention of turning it into a franchise. But let me tell you, it’s hard work, and takes a lot of time and money. Here are some of the lessons we have learned while creating Krave Kobe Burger Grill.

DO: Plan Ahead
Know that you want to create a franchise from the beginning with your concept and branding in mind and a good business plan in place. Budget and hire the best people you can to develop your concept from the beginning. Plan for many outside contractors such as a brand strategist, chef consultant, operations expert, architect, interior designer, retail developer, lawyer, etc.

DON’T Do Everything Yourself

Know what your strengths are and hire professionals to do things you are not good at. Pad your budget for unseen resources.

DO Create your Brand
Develop a name and logo you can trademark. Make sure you can get something no one else has and secure a good url in all formats (.com, .net). If you plan on franchising abroad, have your lawyer check in those areas as well. Before you go too far, make sure your trademark is approved.

DON’T Buy a Cheap Logo

It may seem like a bargain to get a $99 logo but it’s not if you can’t trademark it because others have it. Work with a professional to create and trademark your brand as well as your name, not an online quick serve company.

DO Get a Great Location
Make sure you work with a broker and get all demographics and know where your target audience is. Also make sure your space isn’t too large or too small for your concept.

DON’T Pay Too Much Rent

Do the math and make sure you can easily afford your location without struggle. Also negotiate as much tenant improvement money as you can and 2-3 months of free rent before you open if possible.

DO Market Your Business
Focus on making your company is busy and as profitable as possible. Create a buzz with PR, Social media and marketing efforts so people know who you are in the beginning. People want to invest in businesses they see doing well.

DON’T Take Short Cuts with Staffing
You are still operating a business that needs to be successful. Hire the best team you can to run and manage it, especially if you are not able to be on-site everyday.

DO Open a Second Location

I would highly recommend opening a second and even third location before starting to franchise. This is a great opportunity to perfect your interiors and your brand elements, and really make sure you get everything just the way you want it.

DON’T Settle for the Same
If you are not happy with something, this is the time to change it. Think of this as your prototype store and get it right in order for people to see the business they will want to purchase.

DO Document All Procedures

Once you are open and ready for operation, work out the bugs for a while before thinking of trying to franchise. After all operations are smooth, document your processes then hire a professional to finalize the operations manuals.

DON’T:  Submit your own Manuals
You may think your manuals are good enough but you will still want a professional to review and finalize them before submitting them for your FDD.

DO Stay on Budget

Make sure that your franchise model is affordable for others in the future. You will need to document how much your build out was. If it’s too much, that may deter others from investing.

DON’T: Be Too Frugal
Do your build out and concept the way you want it and not just to create low numbers. A brand you are proud of is one that others will want to be part of.

DO Your FDD with a professional
Work with a lawyer that specializes in franchising, and when possible, choose one in the area your business is in. For us, having someone who works with the restaurant industry was invaluable. 

DON’T Skimp on Professional Help
It’s true lawyers can be expensive, but do your research and get the best you can afford. Make sure they also have the capability to review and get all future marketing materials approved.

DO Hire a Franchise Sales Team
Make sure you work with a company that likes to work with emerging brands and you are not a small brand in a huge company. You also want to work with people who specialize in what your concept is and has the reach of a large database. This is important; don’t just go with the company that sells you first. Do your homework and find the perfect fit.

DON’T Forget to Budget for Sales
All this can add up and until you sell a franchise, this is all an out-of-pocket expense. Be sure to not cut yourself short – it may be a year or more before you see any sort of return.

DO Market your Franchise
If you want to see better results, pay for leads, hire a PR firm, do franchise expos. Again, work with people who specialize in emerging brands. It’s imperative that your team feels they can help you succeed. Communicate on a regular basis with all players to keep everyone on track and progress moving forward.

DO Have Patience
This may not happen overnight, be prepared to try different things to improve your concept and marketing. There is always more to learn and improve upon.

DON’T Franchise Before you are Ready!
Go into this knowing that you want to be a franchise but don’t be so consumed that you forget to run your company to its full potential. Get everything the way you want it and you will know when it is time to expand

About the Authors

Ardy Farokhirad is a franchisee with multiple locations of another brand and is
now the owner and franchisor for Krave Kobe Burger Grill. Gina Mims of Inspiro Brands is the brand strategist who developed Krave and continues with all marketing and franchise materials. She is also author of the Restaurant Brand Start-Up Plan.

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