Jacob D’Aniello is passionate about dog poop. Yes, that’s right—dog poop. Back in 1999, as he listened to a radio commentator complain about picking up his pooch’s droppings, he got an idea.
“I thought—people will always pay for something they don’t want to do,” he says. “After a little research, I learned that 40 percent of households have a dog. When you combine those two things, you have a great business opportunity.”
Six months later, D’Aniello launched Doody Calls out of his home in Charlottesville, Virginia. The business model was simple: pet waste removal for dog owners, cat owners and homeowner associations. It didn’t take long for the idea to take off. Three years later, he quit his day job. And in 2004, he decided to franchise.
“Franchising is all about the system,” D’Aniello says. “The business had become very sophisticated—we weren’t just running around with a bunch of shovels—and it was time to expand.”
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Today, Doody Calls has 42 franchise locations across the U.S.
So how do you franchise like D'Aniello did? Here are a few helpful hints.
Analyze your business
“Franchising isn’t right for everyone,” says Matthew J. Kreutzer, Esq., franchise lawyer at Armstrong Teasdale LLP in Las Vegas, Nevada. “You need to have a business with procedures that you can teach someone to duplicate.
“Successful franchises have brand recognition and a system that defines customer service. You will not be successful if your customer experience isn’t consistent across all locations. Uniformity defines the value of a franchise business.”
Before popping ‘OPEN’ signs in locations all over the country, talk to owners of similar businesses who’ve experienced success.
“Call up businesses in similar industries that have decided to franchise,” D’Aniello suggests. “Most people are very willing to talk and will share their experiences with you. That way, you will know what you are getting into.”
Secure your name
It pays to register your business name with the U.S. Patent and Trademark Office before diving into the franchising process.
“Some names may not be available,” says Kreutzer. “Find this out immediately; it can cost you a lot of money to fix it down the road.”
Grow your reserves
Franchising can cost a lot of time and money, so it pays to be prepared.
“It is important to assume it will cost much more than you anticipate,” D’Aniello says. “Franchising is a very capital-intensive business. You need to provide a lot of services for your franchise owners and there will be a period of time where you won’t be making royalty income. You need to be prepared to weather that.”
Consult legal help
According to Kreutzer, franchisers need a Franchise Disclosure Document, or FDD.
“This is required by law and contains key disclosures that let your potential investors know what they are getting into—a lawyer can help you with this,” he says.
Not sure where to find a reputable lawyer?
“The best places to look are through the American Bar Association’s Forum Committee on Franchising and the International Franchising Association,” says Kreutzer. “Both have excellent databases.”
Prepare to let go
Entrepreneurs are a passionate bunch and, generally speaking, like to have control of everything relating to their business. Therefore, it can be terrifying to give up control to a franchisee.
“You have to get over it and understand that you are trusting your vision to other people; definitely a trade-off of franchising,” D’Aniello says. “It is a relationship-based business. Make sure you and your franchisee have the same definitions of success. Define what you want the business to look like and what you will expect from each other.”
Create an operations manual
This may seem mundane, but it is vitally important to the success of a franchise. Some business owners opt to write a manual themselves, while others hire professional manual writers.
“The operations manual creates a uniformity of experience,” says Kreutzer. “It forms the basis of your system.”
Restructure your time
Franchising can be a labor-intensive business. It may force you, as a business owner, to take on new roles and leave others behind.
“As yourself if you are willing to walk away from the day-to-day operations of your current business, because, really, franchising is another job,” Kreutzer says. “Your job will no longer be to run your store every day—you will need to take on the role of franchiser.”
This can be a difficult transition for small business owners.
“When you are a franchiser, you will be fielding phone calls from franchisees and making field visits,” he says. “If you’d rather not do this, hire someone to run your franchises for you.”
Check out some other great franchising resources:
Franchising & Licensing: Two Powerful Ways to Grow Your Business in Any Economy, by Andrew J. Sherman