Looking to Franchise into other states

Discussion in 'Franchising' started by JohnsonLawnTreatment, May 23, 2013.

  1. JohnsonLawnTreatment

    JohnsonLawnTreatment LawnSite Member
    Messages: 13

    First wanting to know if anyone has tried to do something like this. Second i am looking to come up with a name better then what I have as I want to eventually make this a regional chain and hopefully someday make it a national chain.

    What are some of the thoughts on the best way to accomplish this?
  2. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    You need some VC money and a Franchise ATTY to start.
    Jbh0724 likes this.
  3. billyray

    billyray LawnSite Member
    Messages: 17

    “What are some of the thoughts on the best way to accomplish this?”

    You could do licensing instead of franchising – fewer hoops to jump through. Still, you’d need an attorney to draw up a licensing agreement between you and the other party; to make sure you don’t include things that would legally constitute franchising. You’d get a monthly payment for the licensed use of your intellectual property and name. However, if they decide to ditch you and do it without you after you’ve shown them the business, it’d be cost prohibitive to try to enforce your agreement – mainly because they probably wouldn’t have the funds to pay you.

    Any name or service mark and slogans that you come up with ought to be registered as trademarks. It’s not expensive and is a good idea whether you license or franchise; or not – just so you don’t go a pick a name that some other large firm is using someplace and they come and force you to change after you’ve used it for years. That’s not likely, but it’s cheap insurance.

    Keep in mind that your name is all but useless in your franchising and licensing endeavors unless you have the capital to launch a nationwide marketing campaign. That is, a name that nobody knows is not very valuable to anyone but you – and it’s only valuable to you because you’re the vain, prideful genius that came up with it. Still, “LawnGENIUS” or whatever name you choose ought to accurately describe your business and Unique Selling Proposition (USP). After all, it doesn’t hurt to think and behave like a franchisor even if you never expand beyond your own subdivision.

    Along those lines, for actual franchising, you’d need to sit down and write up a manual with systems for everything – including everything from proper mowing heights to urination in the field to prevent accidental exposure or ingestion. Those systems would help you even without franchising; and are not needed for licensing. If you suck at writing, you could probably hire a starving grad student from a local business school who could probably do it.

    By the way, LawnGENIUS is already taken.
  4. Armsden&Son

    Armsden&Son LawnSite Silver Member
    Messages: 2,358

    Wow billyray! A wealth of information! I really enjoyed that and I'm not even thinking of expanding! Were you posting under a different name until recently?
  5. billyray

    billyray LawnSite Member
    Messages: 17

    “Were you posting under a different name until recently?”

    This is my one and only user name – I’ve just been a fly on the wall off and on for a few years; trying to learn as much as I can, when I can. I’m glad you enjoyed my ranting. Personally, if I had to sit down and write a systems or training manual, I’d buddy up with an existing or former franchisee and try to “borrow” his – then, “improve” it. I don’t think I’d do it from scratch – it’d be just too big a project for me.
    Jbh0724 likes this.
  6. JohnsonLawnTreatment

    JohnsonLawnTreatment LawnSite Member
    Messages: 13

    Billy- I did hear about that from a few others about the licensing thing and not franchise. Very interesting as The other thing that made me think was would I have to pay to register the company in every state to license (For each company in that sate). Meaning if I sell 9 licensees in Delaware would I just have to pay the company fee once or 9 times. That is something else I want to look into.

    Thank You for your help. Have you licensed a company before?
  7. billyray

    billyray LawnSite Member
    Messages: 17

    “Have you licensed a company before?”

    Yes, but not successfully. The licensee didn’t need me once he was set up and going - after wasting a lot of time in discussions and re-negotiating, he changed his company name and pressed on. And he’s doing well. I would have been better off getting paid as a consultant for helping him set up his business.

    It’s not all his fault. Initially, I brought a lot to the table – my expertise and experience. He needed that and was willing to pay for it. However, after he got going, he realized that I was no longer contributing value to his business, but I was getting paid anyway.

    A national franchise brings a well-known name that has been marketed extensively – I didn’t have that. They also bring volume discounts for products – I didn’t have that either. Once I introduced him to my suppliers, he was able to open an account and get the same prices as me. Another thing they bring is contracts from large corporations that they are servicing across the nation. That was another thing in a long list of things that a successful franchisor brings to the table that many small players like myself simply don’t; and can’t.

    If I did it again, I’d just go the consultant route; or I’d figure out a way to make myself so valuable to the business that the thought of doing it without me would be unthinkable. In the early stages, it’s easy to do, but it gets more difficult as the business gets on its feet and the licensee becomes more independent. That is, the licensee’s business HAS to be better with you than without you, which is a no-brainer in the early stages, but once he knows everything that you do, how are you going to contribute a substantial enough of a value that he can’t or wouldn’t want to do it alone?

    Anyway, I think that’s the main stumbling block; however if I had that figured out, I’d have locations across the nation by now. So, as is most often the case, I’m more help in learning what not to do, then what to do – I could be a poster boy for business mistakes. That’s where my real expertise lies. If there is a mistake to be made, rest assured that I’ve made it more than once.

    If you ever do get sued or get involved in a lawsuit, I can provide you some do’s and don’ts – I’ve seen jury trials through to the end…it’s rarely pretty. And that’s why I mentioned that the legal enforcement of agreements is rarely worth the effort and expense. So don’t plan on your agreement and the threat of litigation keeping the licensee in check because it won’t. You have to bring irreplaceable, long-term value to the table for licensing to work.

Share This Page