Before any form of franchising is possible, it is necessary to take the proper business and legal steps to offer franchise opportunities to potential franchisees. This may require an intensive evaluation of the core business, an analysis of the marketplace, and a determination of what legal obligations the creation of the franchise will entail.
While there is no definite answer to how long it takes to franchise a business in North Carolina, generally, business owners can expect to spend at least three to six months before opening the franchise to potential buyers. However, with the help of an experienced attorney, business owners could take the necessary steps to give their franchise the best chance for success and expedite the process of developing their expansion plan.
Most businesses looking to offer franchise opportunities will start with an in-depth analysis of the current income levels, outstanding liabilities, capital assets, and determining if any sudden changes in income or costs are imminent. Performing a thorough franchise feasibility study is often an excellent first step in the franchising process.
It is also vitally important to evaluate the impact of the franchising opportunity on the marketplace as a whole. Potential franchisors should determine if the potential market share would be profitable enough. Finally, businesses should determine what the raw cost will be to initiate this process. Planning for all these issues can take multiple months to complete before even starting making an exact timeline for franchising in North Carolina.
Once a company makes the careful decision to offer a franchise opportunity, they can take the formal steps in moving towards that goal. The first step is to draft an accurate and complete franchise disclosure document (or FDD). This is a document that businesses must prepare which identifies the seller, discloses the nature of the franchise relationship, and provides specific details concerning the finances of the seller and what services the franchisor will provide. Details to disclose in the Franchise Disclosure Document must include the franchise fee, royalty structure, what training the franchisor will provide, and specific instructions on how to run the day-to-day operations of the franchise.
Much like the process of determining whether to offer a franchise, this gathering of information and production of documents can take multiple months to complete. The more complex the business then the longer this process can take. All in all, potential franchisors in North Carolina should expect to spend a minimum of three to six months preparing to offer a franchise before their franchisees are up and running.
No business or owner should make the decision to offer franchise opportunities quickly. These relationships create unbreakable financial and legal bonds that can affect every portion of a current business. A failure to properly explore the feasibility of starting the process, to protect a company’s intellectual property, or to draft legally binding and unambiguous documents could lead to disaster.
Preparing properly may take multiple weeks or even months. As a result, the typical North Carolina franchising process takes around three to six months. However, it may take longer to ensure accuracy and diligence. Contact an attorney today to learn more about the expected franchise timeline in North Carolina for your business.