There are many benefits to franchising your business. It’s an incredibly lucrative industry and one that keeps our economy thriving. In 2017 alone, franchises provided nearly 7.6 million jobs and produced $674 billion in economic output for the U.S. So, it’s understandable why you want to make your dream of franchising your business a reality. However, before you start the process, there are vital questions you should ask yourself before making the final decision. Learn about them below.
Question #1: Is Now the Right Time?
While timing is everything, especially when it comes to transforming your business, it’s crucial to understand that franchising your business isn’t an overnight process. It will likely take many years until the business is self-sufficient. Are you prepared to dedicate the time and energy to this process? It will also take the focus off of your current location, so before you reach out to a franchise consultant for advice, make sure your business is running like a well-oiled machine, and you have someone who can keep the business running in your absence.
Question #2: Is My Presence Required?
Take a step back and examine your current business model. Not every business makes for a profitable franchise. If your business requires you to work closely with the customer, such as with a graphic designer or a hairdresser, it may be challenging to franchise your business. This is because your clients are often used to working with you directly, and when you bring in another person, they may not view them as being as skilled as you.
It’s possible to train your employees to qualify but consider if the overall experience will be the same. The most successful franchises are ones where you’re able to hire a manager to oversee day-to-day operations, and you’re responsible for overseeing the manager. This dynamic lends itself to a more comfortable transition should you decide to branch out into multi-unit franchising.
Question #3: Do I Enjoy Management?
In all of the excitement of making money, the details about transitioning into a franchise owner role may get forgotten. As previously mentioned, franchising can be a hands-off experience, so if you’re the type of owner who likes to be involved in your business’ day-to-day operations, franchising might not be for you. As a franchise owner, your role will be closer to that of a corporate manager. You’re responsible for tasks like training and mentoring franchisees, scouting out new locations for expansion, creating marketing plans, and meeting with potential franchisees.
Question #4: Is There A Market for My Business?
Just because your business is thriving in one location doesn’t guarantee it’ll be successful in another. Sometimes what seems like a great idea doesn’t translate well to other cities and states. Before you try to franchise your business, first, we recommend you do some research.
Taking the time to ask yourself questions and evaluate your business will give you a clear definition of the kinks you need to work out before you start the franchise process, or it can deter you from franchising at all. A few other questions to answer before proceeding include:
- Is my business familiar in other areas, or is it a new concept?
- Is there a demand for the kind of business/product I’m offering?
- Is my target demographic present in this market?
- Are there potential franchisees who will want to invest in my business?
Question #5: Can I Handle the Costs?
You can have a dream of franchising your business, but without the funds, your dreams won’t leave the ground. It’s not cheap to turn your business into a successful franchise, so prepare to shell out some dough to do things the right way. Initial costs can range between $100,000 to $150,000 to cover necessary items like marketing, insurance, legal and operation fees, and so much more. Be sure to factor these costs into your overall plan and consider whether or not you’re prepared to leap.
Hundred Acre Consulting
Franchising your business can be an overwhelming process, but lucky for you, you have a friend in the franchising industry. At Hundred Acre Consulting, we can guide you through the franchising process and help connect you with franchisees who are eager to join your family.
If you’re interested in learning more about our services and working together, contact us today!