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Does Your Concept Have What It Takes to Franchise?

Written by: Michael Hemenway

Article Overview: To go a long distance, a concept must have something in it. That includes a USP, strong demand in the market and a business format that can adopt to a changing market.

Does Your Concept Have What It Takes to Franchise?

When you have been successful in one or two locations, it’s very natural that you want to progress further. Expansion of business can be done through various avenues and franchising is one of the safe roads to follow. But before you get excited and start planning to circulate franchise business for sale offers, here are some pointers to keep in mind:

• First of all, you have to check out how much demand your business has in the market. Remember, if someone buys a franchise from you, most of the time it will be for ten years or so. Hence, taking the present-day market demand into account is not enough. You have to make sure that there’s enough merit and viability in your product/service to continue for a long time.
• Then you should check out whether your business model can be copied elsewhere. Franchising is the successful transfer of the franchisor’s business model to the franchisee’s location; hence, you must have a format that is easy to learn and implement.
• Your business should accommodate the changes in market practice and varying customer profile. For example, McDonald’s was criticized for ignoring the health issues of its customers. But being a great business, McDonald’s soon introduced salads and other healthy foods for its patrons and fans. Similarly, if there’s a change in your line of work, your business model should have provisions to respond to those changes.
• You should also make sure that there’s something unique in your product/service that no one else can offer. It can be a trademarked product or you can offer your service in a special way. Whatever it is, you have to keep in mind that it should not be easily copied by your competitors. Otherwise, you will be lost in the crowd! If you are entering an arena that is highly competitive (say the pizza franchise field), then finding your USP is vital. If you are a pioneer in some line, then updating yourself from time to time will help you to shake off copy cat companies. If you can become the image that crops up in the head of a person, whenever he hears the product/service that you offer; you can be assured that your concept is ready to go a long distance.

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Article Tags: avenues, business for sale, business model, copy cat, crops, customer profile, franchise business, franchisee, franchisor, health issues, healthy foods, mcdonald, patrons, pizza franchise, pointers, present day, salads, trademarked product, usp, viability



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Building credit - Credit is like reputations, I suppose. Takes a lifetime to build, and only a second to destroy.


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