Creating franchise disclosure documents is required by franchise law but the focus of your work in writing them is to turn good franchise managers into great ones.

Franchise disclosure documents are required to be sent to any potential franchise owner well in advance of when the franchise agreement is signed.  That is not just a friendly reminder from your neighborhood franchise lawyer.  That is the franchise law and to not do it would bring your franchise program to a grinding halt. It is easy to see this requirement that you give to your future business partners such an in-depth and detailed amount of franchise information as an imposition and a burden.

These franchise disclosure documents will be one of the biggest challenges that will face you as you prepare to put your business into a new level of expansion through franchising.  Many disclosure documents become very large and there is no getting around the fact that you, the business owner, must be involved intimately with every page of those documents.

There is no passing this task off to a low level clerk or a ghost writer.  Franchise disclosure documents become part of the legal paper trail of your franchising effort.  To put it bluntly, what you hand over to future franchise owners in franchise disclosure documents becomes legally binding. So it is crucial that you approve and edit every page, every paragraph, and every line.  The best case scenario is that you write every word of the franchise disclosure document or at least that every thought in that massive documentation project are your thoughts.

Look at franchise disclosure documents as an opportunity rather than a problem.

There are two reasons to fight off the urge to look on the preparation of franchise disclosure documents as a nuisance and a burden that the government has come in and heaped on your already too darn busy schedule.  For one thing, if you resent having to prepare your FDD franchise disclosure document, you will probably do a shoddy job of creating this crucial document. That is not a good idea both because it is lazy and because of the negative impact it will have on your hopes and dreams for great success in franchising.

The second reason to put some tender loving care into creating franchise disclosure documents is because the franchise buyer is required to know inside and out what you put in there. That makes franchise disclosure documents valuable training tools.  Here in this one piece of required reading, you can put each and every new franchise owner through a virtual basic training in what it takes to be a great representative of your business.

The old, worn out saying that it is an opportunity instead of a problem applies truthfully to writing your franchise disclosure documents.  There may be no step in the process that is so full of potential to convert raw recruit franchising hopefuls into highly trained franchising experts ready to get out there and make big money for you. That is reason enough to work hard making franchise disclosure documents that you can be proud of.

 

 

Creation of that franchise agreement draft is step one of the adventure of preparing to turn your business into a profitable franchise chain.

When you start the process of preparing a franchise agreement draft, you know you are on the way toward the very profitable step of franchising your business.  It is a savvy business move because when you reach that point that your current business is successful, the natural next step is to expand that business.  Franchising a business is a great way to expand quickly because you shift much of the grunt work of growing the business to eager franchisees and you charge them for the privilege to boot.

When you start thinking about going the franchising route, it is easy to want to jump to the part where you bring in excited investors who love your business model and are eager to take out their checkbooks and buy into your business.  Before you jump to that stage, you have some homework to do including the development of franchising documents. So the faster you conquer what it takes to hammer out a franchise agreement draft, the faster you can get to the big money making stage where the fun begins.

There are a number of franchising documents that you will need to prepare before you begin to get out there and start fishing for great franchise owners.  The franchising world is heavily regulated by the Federal Trade Commission so that franchise agreement draft must live up to the standards that the FTC has in place to make sure the entire franchising transaction stays honest and that nobody takes anybody for a ride.

The process of preparing a franchise agreement draft will facilitate some decision making and preparation that has to happen before any franchises are sold to anyone.  Better to take a few days, weeks or months in getting organized and getting all of your franchise documents together than to discover that you are coming up short once discussions start with real living prospective franchise owners.

Disclosure is a big part of the game.

It is during that preparation phase when your franchise agreement draft is still in the revisions stage that you will hammer out the terms of your franchise including the fees that you will charge, how you will handle distribution of merchandise, advertising and the dozens of other terms of the franchise relationship that will dictate how the machinery of your new business model will work to make you and your franchise investors happy and wealthy.

Along with stepping through he business terms, developing a franchise agreement draft will also help you design the other documents that will be needed when you go into business with the many franchisors who will be beating your door down to invest in your business.  Some of those documents include the franchise disclosure documents and your franchise operations manual.

Not only does the FTC insist that all of your documentation fulfill a high level of disclosure to your future franchise investors, it is smart to let them know every detail of what they are getting themselves for when they become part of your organization as franchise owners.  When you have disclosed every aspect of what it means to run a business that lives up to your requirements, that will bode well for a very successful partnership. And when you are happy and your franchise owners are happy because your franchise agreement draft and the other disclosure documents are complete and correct, that means a very prosperous future for your business this year and for many years to come.

The franchise disclosure documents that you get from the franchisee will tell you all you need to know about your costs of this next big step in your life

Franchise disclosure documents may seem boring but they can ease your mind tremendously. Getting ready to buy a franchise should bring with it a lot of butterflies in the stomach. Those butterflies are a mixture of excitement about the big money you can make owning your own franchise and sheer terror. That terror is actually a good thing because the last thing you want is to be committed to the costs and obligations of a franchise relationship and then begin to think, “What have I got myself into?”

This is where spending some quality time with the franchise disclosure documents can help with that sense of terror. Before pen goes to ink to make your franchise business spring to life, a number of financial disclosure documents will show up at your door that will give you everything you need to know about franchising a business.

Those franchise disclosure documents will lay out in detail the costs that you can expect to pay to get your own franchise small business up on its feet.  There are a number of layers of costs to keep your eye on as you get into this big adventure in your life.  The cost of buying the franchise springs to mind and that can vary widely from one franchise to another. Along with those costs, there will be expenses to get your new business on its feet and ongoing costs such as franchising royalties.  Here is where your franchise disclosure documents can take much of the terror out of what you are getting yourself into.

Putting franchise disclosure documents to the test.

Before you even consider signing any franchise agreements, be sure you plow through those franchise disclosure documents and lay out in detail every dollar and cent this investment is going to hit you for. The up front costs may put some of that terror back into your system.  This is where it pays to put those franchise disclosure documents to the test.

You can put those financial disclosure documents to the test by having a meeting of the minds with other franchise owners in your village. Don’t just happily buy into franchise costs. Check it out that those fees and royalties line up with what rational thinking people pay to be citizens in the elite club known as franchisees. If the costs are not in line with reality, you can contest and negotiate what those franchise disclosure documents tell you. If the franchisee won’t play ball, there are other games in town to play so take your good business elsewhere.

As you evaluate the costs of running your own small business, don’t just blindly accept that what is in the franchise disclosure documents represent all of the expenses you may have to face.  Think about the other aspects of running a business such as employee’s salaries and benefits, hiring a clearing service and keeping plenty of coffee and toilet paper on hand. If you let no stone go unturned in your evaluation of what your costs will be, those hard numbers will put you on a path to big success. Then that feeling of sheer terror can yield to real excitement because you know what you are getting into and it is something very exciting indeed.