Franchise Your Business
Franchise Your Business
"Fran-chis-a-bil-ity": The ability to franchise your business.
Before you start to think about franchising your business, it is important to consider the "Franchisability" of your business.
1. Successful model. There should be a successful model before attempting to franchise. It is difficult to sell copies of your base business if it is struggling. One of the first questions will be, "How is your business doing?", and they will want to see some numbers, which have to be presented in a very specific way.
2. Availability of franchisees. Does a large base of potential franchisees exist that can be taught how to successfully own and operate the business? Are the skills necessary to be one of your franchisees pretty common, or is the business so complex, with such challenging requirements, that the franchisee may have a difficult time operating it? Are certain degrees or certifications required that will reduce the number of people who could buy your franchise?
3. Replication. The business needs to be able to be duplicated over and over. Sometimes this is limited by industry, legal, or geographic restrictions. Think Subway in this regard. The same Subway format functions almost anywhere, and many thousands of them have been opened.
4. Unique customers. Franchises with an assigned geography have unique customers. Internet companies may do business worldwide. There needs to be a means to assign and track customers. The franchisee needs to be able to develop their own customers.
5. Reasonable investment. This is not to say that franchises requiring a $5 to $10 million investment cannot be sold, but franchises under $100K have a much larger base of potential buyers. If bank financing is required, it will be more difficult to get the franchises open than if not.
6. Competitive in its market. The business needs a unique value proposition, or compelling message, in its market. Me-too franchises generally experience limited success. Honestly evaluate your market position. Think about the larger competitors who lead your industry and the effect they can have on your franchise system.
7. Budget. There needs to be a sufficient budget to initiate the franchise program and carry it through the start-up phase. It does not take "six figures" to develop a franchise program, but you need sufficient to initiate the program and start selling franchises.
I will be pleased to provide a no-cost initial consultation if you wish.