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Expanding your franchise business

Written by: Sebastien Page

Article Overview: It’s likely that you will have the desire to expand your business, after finding some success in the franchise world.

Expanding your franchise business

It’s likely that you will have the desire to expand your business, after finding some success in the franchise world. Someone you shouldn’t forget when you start to set plan for your expansion is your franchisor. Make your franchisor aware of your plans and keep him up to date with the developments. Don’t shy away from asking for help or advice from your franchisor, because expanding your business is tricky and you could use all the help that you can get.

Before thinking about expanding your business, there are many warning signs you should watch out for. There are also misleading signs that may cause an inappropriate sense of confidence and may distract you from any problems that may be on the horizon .

The fact that you’ve managed to deal with certain problems that you’ve met on your own, doesn’t mean that you couldn’t always use a little help from someone more experienced, like the franchisor, for example. Giving yourself a false sense of security can end up making you both arrogant and blind, causing you to fall into many business traps that you were not expecting.

Franchisors normally have their eyes on their franchisees’ businesses and keep a look out for their own set of warning signs. They will usually map out the expected problems for you and tell you how to anticipate them. However, their help, while essential, is not solely sufficient. You have to learn both how to keep an eye out yourself as well as carefully interpret any signs to avoid unnecessary difficulties, you could clearly do without.

Let’s use an example :

Let’s say that your sales are up and new contracts are coming in. These signs are surely an indicator that your business is doing good enough to allow you to expand, right? Well, it depends on how you look at it. On the surface, you seem to be doing great and there couldn’t be a better time for expansion. However, if you look deeper, you’ll find several aspects to take issue with.

The sales are up, which is excellent, but how are your receivables? Do you actually have enough cash flow available? A new one year contract may sound great, but did you read it carefully? Do its clauses really imply that signing it is the right step for you at this point? It’s better to spend enough time asking yourself these questions than receiving a surprise letter from the bank telling you how it’s planning to repossess your business.

That’s why you should think long and hard, then set a plan carefully with the help of your franchisor, so that your dream of expanding your business doesn’t end up being a nightmare.

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  Benefits of Franchising
  Open Letter To Business Owners About Franchising

Article Tags: better time, confidence, contracts, desire, expanding your business, false sense of security, franchise world, franchisees, franchisor, horizon, sense of security, traps, unnecessary difficulties, warning signs



Related Forum Posts
What are the reasons why you would NOT buy a franchise? - Even though I'm a strong believer that franchising as a great business model, I would personally not buy a franchise. My main reason for not buying a franchise is that you're not your own boss. You take all the risks without really being in control of your business. To me that's the biggest drawback. What about you? What are the reasons why you would NOT buy a franchise?
Re: What is the Best Franchise? - As a franchise owner the things that I look for in a prospective franchise is: 1- A proven track record. Too many franchises try and branch out long before they have perfected their product, don't become a guinea pig for them to figure out what works and what doesnt. 2- Support. A good franchise should have great communication with it's franchisee's and be available to meet it's franchisees needs. Youre only contact with them shouldn't be when you have a problem. Good franchises involves it's franchisees in building it's business. 3- A Great System. McDonald's doesn't exactly make a good hamburger but they have an excellent system of conducting business. The real value in a franchise is the system, not necessarily the product. There are many other factors in deciding on a franchise but many of those are personal to you and your situation. The best thing to do is to conduct as much research as possible and speak with every current franchisee you can and get a feel for the franchise. garyshouldis.com
NEED SOME CLARIFICATIONS - My mother and I own a fantastic birthday party business. We have always thought it would be a good franchise for anyone wanting to work out of the home. How would we get our business to franchise? The parties include a costumed character, a birthday card art project, interactive story times, and themed games. We are based in Buffalo, NY . It is very successful here, and we want to get it out to the world, while making a couple bucks. How do we franchise this?
Franchising vs. Licensing - While Ken's definition of a franchise is correct, I disagree with his statement that a franchise and a license can mean the same thing. A franchise [u:2pwsjr5r]contains [/u:2pwsjr5r]two licenses. A trademark license (the name and fee) and a business opportunity license (a system and a fee). The combination of those licenses in the same relationship creates a franchise. If you want to license a business opportunity, you need to tell your licensee that they [u:2pwsjr5r]cannot use your trademark[/u:2pwsjr5r]. If this is your growth strategy, you will neglect to build a brand. While that is not always important, it often is. We tell our clients not to think of whether a particular business relationship will be, but instead to structure the relationship the way it makes sense from a business perspective. If it then turns out to be a franchise or a license, then so be it. The difference in cost between the two forms of expansion, done properly, is not very signficant. If you are interested in learning more, I would be happy to send you a free copy of a one hour seminar on "How to Franchise a Business." It goes into some detail on this topic. You can write to the email below or get it on my website.
Hello I am a franchise expert - Hello, I recruit franchise owners for successful franchise concepts based in the USA. Many of my franchises are looking to expand north to Canada in all major centers. I enjoy networking and answering questions about franchising. If anyone is interested in the franchise world or looking to buy a franchise then contact me. I have a wealth of information and like to help. Thanks for your time. Michael Somer


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