HOW TO FRANCHISE YOUR BUSINESS If you are ready to take the step to start selling your own business as a franchise, you’ll need to do a lot to make it viable.
Your business is a success. You have a cadre of loyal customers, strong earnings and a steadily expanding base. At this point, many business owners look to franchising their business as the next step. Though this is a good alternative, and potentially very lucrative, selling a franchise is a vastly different enterprise than running it. You’ll need to master new skills if you want to be a success in the highly-competitive world of franchising. Here is a brief list of what you need to be aware of:
1. Is your business a viable franchise? Some businesses lend themselves to franchising, while others do not. Before you take the plunge, you’ll have to do your homework. Are there any other similar franchises? What business models do they use? How saturated is the market? What will you have to change, add or remove parts of your business to make it attractive to a potential buyer?
2. The business is the product. When you were running your business you were selling a product or a service to your customers. Selling franchises is no different, except now the product you are selling is the business itself. Your pitch will have to be enticing enough to attract serious buyers who are capable of running their own business.
3. Your role will change. Where as before you were the owner/operator of a successful small business, now your role will change into something much different. Instead of managing the day to day operations of a store or shop, you’ll be acting as an executive overseeing numerous franchisees and ensuring your franchise business continues to grow. The responsibilities you have will be vastly different than those of a small business owner, and you’ll need to be ready for it.
4. You are starting over again. Just like with any other new business, you are going to experience the business cycle all over again. Starting out you may not have a lot of cash flow, your expenses will be high and you will have to spend a lot of time learning the ropes. As time goes on and your franchise business grows, new problems will arise just like they did when you were operating the original small business.
5. You will need to find good franchisees. Setting out into the world of franchising requires you to carefully watch over your brand. Finding strong, reliable franchisees is a key to this process. You won’t get very far if you sell your franchise to the first person who comes along. Make sure your buyers are competent and capable business owners.
6. Your franchise agreement is your foundation. If you decide to start selling franchises, drafting a strong, reliable franchise agreement is essential. This will be the most important document in your franchise business, so taking the time to ensure it is a quality product is a vital step. Even if you have to spend extra to consult a solicitor or franchising expert, it will be well worth the investment.
How to franchise your business - To learn more about this author, visit Ian Macleod's Website.
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Ian Macleod
(Visit Ian's Website)
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