Things are going well with your business, and someone says to you, “You should franchise!” Should you? Are you ready? Before you leap to action, ask yourself six critical questions.
Is your business idea performing consistently?
Sure, you’re having a good season right now, but is your business established enough to show strength across all seasons for a number of years? Buyers are looking for consistency over potential, so you need to be ready to prove to them by your own model that they can be assured success. This evidence will elevate the value of your franchise.
Is your business marketable?
Yeah, you’re doing well, but what makes your business stand out above your competition? What do you bring to the table with your franchise that others don’t? Your business should get others excited about the concept of doing the same thing. We’re talking unique, credible, success, vibe, and sizzle. These details are what attract potential franchisees to you.
Is your business concept repeatable?
In other words, can it be cloned? You want to make sure that your business is easy to replicate into a franchise. The magic power should be in the business design, product, or service. If your key to success is the perfect location or rockstar employees, replicating that formula may be difficult to ensure success to a franchisee. Your business should be easy to replicate in a variety of markets and locations. Your methods and processes should be easily teachable to others.
Can you promise a return on investment?
Franchisees are looking for a profit, and they turn to franchises for a short cut on that learning curve. Are you able to provide those assurances that you’ve done the hard work for them and streamlined proven processes to achieve a profit for them as well as you by way of royalties?
Are you ready to commit yourself to the extra responsibility?
When franchising your business, you are growing your brand with the help of others’ investments, but they expect some commitment from you in exchange. As a franchisor, your role will change from an owner/operator to owner/operator/sales/support/marketing/trainer. Part of the value of your franchise is your participation and preparation for the franchise success.
What about capital?
Yes, it’s true. It costs money to make money – even when franchising. You will require funds first for the legal details of your franchise. Next, there will be costs associated with marketing your franchise and a robust training program complete with materials for your franchisees. Before taking steps to franchise, make sure you have the means to see it through.
Talk to an expert
Before making any sudden moves toward franchising, give each of these questions some considerable thought if you can answer some questions with more confidence than others, list out the goals you still need to achieve, and a plan to achieve them. Consider it your playbook to the ultimate goal of franchising your business. It would help if you also spoke with a franchise consultant to identify and fill any additional gaps to your readiness. They have first-hand knowledge about what details get the attention of those prospective franchisees.