
How To Franchise Your Business: A Six-Step Overview
Knowing how to franchise your business takes more than enthusiasm. It takes documented systems, legal preparation, and the right partners.

Editor's note: This post was originally published on February 23, 2022, and has been updated for accuracy, comprehensiveness, and freshness on March 31, 2026.
If you’re starting or running an LLC, you’ve probably heard the term “EIN” come up. An Employer Identification Number is a nine-digit number assigned by the IRS that functions like a Social Security number for your business. But not every LLC is required to have one. Here’s what you need to know.
An EIN (Employer Identification Number), also called a Federal Tax Identification Number, is used by the IRS to identify a business entity. It’s required for many business tax filings and is used when hiring employees, opening a business bank account, applying for business licenses, and filing certain tax returns.
Whether your LLC needs an EIN depends on how it’s structured and what it does:
That said, even if you’re not legally required to get an EIN, it’s generally a good idea to have one. It protects your Social Security number from being shared with clients, vendors, and banks, and it makes business banking and tax filing more straightforward.
Applying for an EIN is free and straightforward. The fastest method is to apply online through the IRS website at irs.gov. The online application is available for businesses with a principal place of business in the United States or U.S. territories.
You can also apply by fax or mail using IRS Form SS-4, though processing times are significantly longer.
Setting up an LLC involves more than just filing paperwork. A LegalShield® Small Business Plan gives you access to a provider law firm that can help you understand your tax obligations, review your operating agreement, answer questions about business structure, and support you as your business grows.
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Not every LLC needs an EIN, but most do. Single-member LLCs with no employees can use the owner's Social Security number for tax purposes. However, if your LLC has multiple members, has employees, or is taxed as a corporation or partnership, you're required to have one.
You can use either, but an EIN is the safer option. Using your SSN for business taxes and banking means your SSN shows up on invoices, contracts, and government forms.This increases your risk of identity theft. An EIN gives you the exact same tax ID functionality without exposing your personal information.
No. Forming your LLC and getting an EIN are two different steps. You'll need to form your LLC with your state first. Then, you apply for an EIN through the IRS. The EIN application is free, and you can get your number in minutes through the IRS website.

Knowing how to franchise your business takes more than enthusiasm. It takes documented systems, legal preparation, and the right partners.

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