Franchising can be a faster way to grow

Emmy Preiss and Harriet Mills launched a party-and-paint franchising empire after a road trip to South Carolina that involved at least two bottles of wine and two great works of art.

"We went and had a girls' weekend there," Mills said. "And the rest is history."

Inspired, the pair opened their first Wine and Design in Raleigh, N.C., in March 2010 and began franchising the business a year later. Today, Preiss, 31, and Mills, 32, have 26 franchisees in North Carolina, South Carolina, Virginia, and New York.

Franchising is one path small-business owners can take to expand their enterprises.

"Franchising is perhaps a faster way to grow than growing based on their own capital and the credit market," said Ritchie Taylor, a lawyer with Manning Fulton in Raleigh.

Franchising involves replicating a business through manuals, software, and other systems, meeting state and federal requirements, and recruiting franchisees who invest their own capital. Successful franchisers constantly work to improve their brands, create and test products, and support franchisees, Taylor and others said.

"When you become a franchiser, you are making a massive commitment to other people to help them get up and provide for their families and their children and their wealth-building," said Doug Schadle, chief executive and cofounder of Rhino7, a franchise sales and development firm in Apex, N.C.

Before exploring franchising, small-business owners need to polish their business models and systemize what they are doing, Taylor said. They should also be prepared to spend time and money to create the required documents and support systems for franchisees.

Franchisers can spend from $20,000 to $100,000 in start-up expenses and a legal process that takes three to six months, Taylor said. "It is not an insignificant investment. But the opportunity is cheaper also than opening up a second location on your own."

When small-business owners are ready to franchise, they should start by reaching out to qualified franchise attorneys or consultants to discuss the suitability of their concepts and read books on franchising, said Taylor, who recommends Franchising for Dummies, cowritten by Wendy's founder Dave Thomas.