Congratulations on your success! Franchising can be a smart idea to expand your already profitable and proven business concept; however, the process of doing so legally is expensive and lengthy.
With less than one year in business, your company will probably not have sufficient financial data in order to meet FTC disclosure requirements. I suggest that you speak with your attorney regarding this matter to determine if such an offer is even feasible in your situation.
There are literally hundreds of issues that must be addressed when writing a good franchise agreement; the cost of which will not be sustainable for a single franchisee location. This should be a business decision based on your future plans for expansion to a number of locations and not any one opportunity.
Assuming that the conditions are right, you may wish to consider taking on that shop owner as an investor in the new location. Here too, there are many tricky questions to consider like how the deal would be structured?, at what price?, who would play what role? and would you want to have an investor to answer to anyway?... but the end result could be that you could expand your business as a company-owned location and not a franchise.
Andrew
