Can your business work without your daily intervention?

Test that question before preparing a franchise brochure. The SBA recommends having a profitable second location before franchising. Treat this as a practical readiness test, rather than a universal legal requirement. SBA guidance on duplication.

Build a folder of evidence

Gather location accounts, staff instructions, customer complaints and records of decisions that still need you. Include quieter trading periods when assessing the business. Ask your accountant to show the result after allowing for someone else to perform your operating role.

• Explain why customers choose the business in one clear sentence.
• Identify which parts of that promise another operator must reproduce.
• List decisions that currently depend on your personal knowledge.
• Choose a test location or operating team and define success before starting.
• Record exceptions and unresolved problems alongside the headline results.

Use the same discipline you would apply when validating a business idea: specify the assumption, the test and the evidence you need. Avoid changing the success criteria halfway through because the results look inconvenient.

Hypothetical example: a neighbourhood cleaning service

Imagine a cleaning business where the founder quotes every job and handles every complaint. Ask another manager to prepare quotes using a written guide, then review the differences. Record whether the guide explains unusual surfaces, access problems and customer requests clearly enough.

If the manager must call you repeatedly, identify the missing decision rule. Update it and repeat the exercise with fresh jobs. Use the findings to decide what needs further testing before another owner pays to use the system.

What should you put in the operating manual?

Write instructions around real tasks and test them with someone who did not write them. The SBA recommends documenting both the setup and daily operation of a new location, including equipment, technology, staffing and marketing. SBA guidance on creating a system.

For each task, specify the starting information, responsible person, steps and acceptable result. Include an escalation route: who should be contacted when the normal instructions do not fit. Use this standard operating procedure guide to structure those individual instructions.

Keep the first version focused on work that affects the customer experience or the operating result. Add photographs or short demonstrations where words leave room for confusion. Assign one person to maintain the current version and collect suggestions.

Build training around observable tasks. Ask the prospective operator to demonstrate a booking, a quality check and a difficult customer conversation. Write down what must be demonstrated before you are comfortable approving an opening.

How should you plan franchise fees and costs?

Prepare separate budgets for developing the franchise, supporting it and opening a franchisee's business. Get quotations for outside services and estimate your team's time explicitly. Keep unknown amounts marked as unknown until you have a reasonable basis for them.

Initial fees, ongoing royalties and advertising fees are among the cost categories described in the FDD overview. A royalty is an ongoing franchise payment; define its calculation clearly in your proposed terms. FDD explanation of fees.

Work through both sides of the arrangement

• For your development budget, include legal work, documentation, training preparation and recruitment activity.
• For continuing support, estimate staff time, visits, reporting and help with operational problems.
• For the operator, list premises, equipment, opening stock, recruitment and launch preparation.
• For ongoing trading, model payroll, supplies, occupancy costs, agreed fees and a cash reserve.

Build a base case and a weaker trading case. Ask what the operator would have left after the proposed fees, and how much support you could afford to provide. Separate expected profit from the timing of payments using a small business cash flow plan.

In a hypothetical cleaning franchise, test what happens when customers pay later than expected or a vehicle needs repair. Do not present those assumptions as market averages. Show the applicant which figures come from your records and which are planning assumptions.

Check your own position without assuming a steady stream of new franchise sales. Write down how you would fund support for existing operators during a recruitment pause. Rework the offer if the promised service has no credible funding plan.

What should you ask a franchise lawyer?

Give the lawyer a short commercial brief before asking for documents. State where you intend to recruit and operate, what rights you will provide and how you expect to charge. The SBA recommends using an experienced franchise attorney when structuring the business and preparing documents. SBA legal preparation guidance.

Separate the FDD from the franchise agreement

A franchise disclosure document, or FDD, is a legal information document given to prospective buyers during the US presale process. The franchise agreement sets the terms of the relationship between the parties. FDD and agreement explanation.

For an international expansion plan, ask counsel to identify the franchise legal requirements for each intended market. Do not use this US document description as proof of another country's requirements. Request a written list of what must happen before advertising, accepting money or signing.

• Which business owns the brand and can grant the proposed rights?
• How should territory, online orders and competing locations be addressed?
• How will fees, reporting and any purchasing requirements be defined?
• What support and training commitments should the agreement contain?
• How should renewal, transfer, termination and disputes be handled?

Prepare your brand ownership records alongside this trademark registration guide. Ask for a scoped proposal covering initial advice, drafting, revisions and continuing updates. Make the deliverables clear enough to compare proposals on more than the headline price.

How do you choose and support the first franchisee?

Write the selection criteria before spending on recruitment. The SBA recommends a marketing campaign and a defined process for interested candidates once the business is legally ready to sell franchises. SBA marketing and sales guidance.

1. Collect basic information about experience, available time and financial preparation.
2. Discuss the actual working week, including difficult tasks and responsibilities.
3. Provide the information and documents approved for that stage by your lawyer.
4. Allow space for questions, independent advice and a careful assessment.
5. Complete the agreed checks before moving to signing, training and opening.

Use practical scenarios in the interview. Ask what the applicant would do if a customer demanded an exception or an employee ignored a quality rule. Look for a willingness to follow the system and raise problems clearly.

The franchisor-franchisee relationship is not automatically an equal partnership; the general overview describes an arrangement in which the franchisor often holds greater bargaining power. Discuss decision rights openly. Overview of the relationship.

Propose a clear contact route for routine questions, urgent incidents and disagreements. Specify who on your side owns each response. Use the small business team guide to assign those responsibilities before promising support.

During the first opening, keep a shared issue log. Record the problem, responsible person, next action and agreed review point. Use those records to improve the manual and training before accepting another operator.

What can you finish this week?

Aim to produce a readiness pack this week. Give each task a named owner and finish with documents that a manager, accountant or lawyer can review.

• Write a one-page description of the customer promise and the business you intend to replicate.
• Collect operating records and identify where the founder still makes essential decisions.
• Draft one important procedure and ask another person to follow it.
• Create separate financial worksheets for the franchisor and franchisee.
• Prepare the legal questions, applicant criteria and proposed support responsibilities.

End the week by listing the unresolved issues that would stop you from proceeding. Give each one a next action rather than a vague instruction to investigate. For example, replace “check training” with “ask the manager to complete the complaint exercise using the draft guide.”