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How to Franchise Your Online Business

Becoming a franchisee is a way for aspiring entrepreneurs to get a leg up in businesses with established markets and business models. Investing in a franchise brand allows entrepreneurs to pay an initial fee to invest in their online business model and receive marketing, training, and operating support in return. A franchisee then benefits from the reputation of the franchise business and may receive ongoing support and training to maintain business acumen. If you have an online business that you believe can turn into a successful franchise model, we explore your options and essential steps.

Franchising Your Online Business

Online businesses, including e-commerce websites and other digital sales-focused platforms, have become top financial performers. An online business is essentially a business that you can operate entirely or in part on the Internet. A business’ webpage is considered the business’ storefront, which saves a considerable amount of money as the business owner does not need to invest in a commercial property or equipment required.

As a business owner, you may choose to run the business wholly online without stocking any products. Rather, you could offer services you deliver online, such as:

  • graphic design; 
  • content writing; or 
  • tutoring services. 

On the other hand, you may want to start an online business that sells products. There has been an increase in operating businesses that drop ship their products instead of finding a place to store them. Under a drop shipping arrangement, a franchisee’s business takes orders and processes payments online. Then, the franchisor or another company would fulfil and ship the orders to customers.

There are also options that require the franchisee to do some work operating the business from a storefront. For example, a franchisee may purchase an online franchise that involves selling gift baskets. The franchisee would get all the customers online through a website that displays the franchise’s name, but the gift baskets are manufactured from a location and shipped to the customers separately.

Examples of Successful Online Franchise Businesses

Snap-on Tools is a business that sells tools and equipment directly to other businesses. Using a mobile sales model, each franchisee has a truck and a selection of inventory. The franchisee can then run administrative operations from home and manage their regular route on a schedule of their choosing. In addition, the franchise provides training, exclusive territories, and deals for veterans.

ChemDry is a carpet cleaning franchisee that offers patented cleaning and sanitising products. They provide training, financing and plenty of brand recognition. Clients book appointments and the franchisee can run the business end from home, but they provide the services within the clients’ homes.

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Next Steps for a Franchisor

It is essential that a franchisor can monitor how each segment of their network is performing to identify problems when they arise. Franchisees might otherwise miss their sales targets, impacting the rest of the franchise network. Maintaining regular communication and adherence to systems and procedures will lead to greater administration. As such, Franchisors should look at technological solutions that can allow them to manage the network. 

Customer Relationship Management (CRM) is a clear example of business-critical software that allows business owners to automate numerous mundane tasks to improve business efficiency. For example, a franchisor can use it to do the following:

  • store, update and analyse franchisee information; 
  • monitor contract renewal dates;
  • build stronger relationships within their network; and 
  • manage sales data and enquiries.

When the franchise business starts interacting with customers in the digital space, the franchise business must maintain standards for dealing with customers and establish processes for resolving problems that may arise. The franchisor is typically a level away from direct customer interactions with franchisees more directly liaising with them. Therefore, the franchise business must have a streamlined customer support management plan consistent across the network of franchisees.

Next Steps for a Franchisee

Online franchise opportunities can be varied, like other types of franchises. A prospective franchisee should carefully consider their skills and interests. It is crucial to consider the amount of time you can commit to running an online franchise and the amount recommended for the opportunity being considered. Likewise, check the background of the franchise company and ask questions about its financial and credit status. It is best practice to speak to current franchisees to learn whether they are experiencing success with the franchise.

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Franchisor Financial Disclosure Factsheet

This factsheet sets out the three key financial disclosure obligations every franchisor needs to comply with.

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Key Takeaways 

Franchising is a popular business model for entering established markets and business models, and an online business is no exception. Whether you sell goods or services online, with a robust business plan in place, you may be able to franchise your business. As a franchisor, it is essential you can monitor how each segment of your network is performing to identify problems when they arise. As a franchisee, you want to check the background of the online business and ask questions about its financial and credit status.

For assistance in franchising your online business, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What are some benefits of running a franchised business?

A franchisee benefits from the reputation of the franchise business and may receive ongoing support and training to maintain business acumen. For an initial fee to invest in the business, franchisees can receive marketing, training, and operating support in return. 

Can I franchise my online business?

Though you operate wholly or partly online, you have options to franchise your online business. You first want to consider whether your business is able to be franchised. Likewise, consider what goods or services you will sell. 

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Olivia Locascio

Olivia Locascio

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