You've got a thriving business and customers are lined up around the block. Your friends say that you should strike while the iron is hot and start franchising. Even your spouse is whispering in your ear, "you could be the next Ray Kroc." Looking at the industry, it seems just about any kind of business can be franchised, so why not? It may well be that your business is ripe for expansion, but it may or may not meet the criteria for a successful franchise. Here are some basic guidelines to determine if your business is a good candidate for franchising:
Is your concept proven? People buy franchises so they don't have to go through the trial-and-error themselves. Your track record should include strong and steady sales growth, experienced management, good press, and growing brand awareness.
Is your concept unique? Your business needs to be clearly different from other players in your industry. Take a look at your competitive advantage. Is it sustainable?
Can your concept be duplicated? Your system(s) must be teachable with a short learning curve - three months or less is optimal. Operating procedures need to be documented along with a checklist for quality control and training procedures.
Will your franchisees see a good return on their investment? Your franchise units should be able to generate a 15 to 20 percent return on investment after deducting the royalty.
Do you have the time to start franchising? Make no mistake, this is not the easy road to expansion. You'll work longer and harder than you ever have before and it will be at least 2-3 years before it eases up at all.
Do you have the money to franchise? A big reason why businesses franchise is because it's more economically feasible than starting a chain. But that doesn't mean it's cheap. Capital resources for a new franchise typically run into hundreds of thousands of dollars.
Should You Franchise Your Business? - To learn more about this author, visit Mary Tomzack's Website.
Like this article? Share it with your friends
 |
Related Articles |
|
 Franchising with all its Success
|
| |
This article shows point on why franchising is a better business venture.
|
|
About 60% of all franchise opportunities have less than 50 units.
|
| |
There are over 2500 franchise opportunities operating in the U.S., some of these franchise opportunities are larger systems but most of them are smaller emerging systems.
About 60% of all franchise opportunities...
|
|
The best franchise systems all have effective leadership.
|
| |
The single most important factor in the long term success of the best franchise systems is effective leadership. When you look at the cause of every significant achievement or problem there is always one driving for...
|
|
Hiring a Franchise Lawyer
|
| |
Many assume that, because a franchise agreement is by nature a contract, any attorney is competent to review it. However, this is not necessarily the case. Franchise agreements are unique contracts, and only franchi...
|
|
Question Your Franchise Decision Making
|
| |
Deciding on a franchise may be one of the most important decisions you will make in your lifetime. Before rushing right into it out of sheer excitement, please take some time and ask yourself the basics.
|
|
|
Mary Tomzack
(Visit Mary's Website)
MARY E. TOMZACK is the President and
Founder of FranchiseHelp, Inc. She is a
noted franchise expert and the author of
Tips & Traps When Buying a Franchise
(First publication,1994,McGraw-Hill; new
and completely updated, revised edition,
1999,Source Book Publications). Ms.
Tomzack is often interviewed for franchise
articles in publications such as The New
York Times, "Franchise World" and
"Entrepreneur Magazine."
Reach her at (914) 347-6735 or at m
tomzack@franchisehelp.com or co
mpany@franchisehelp.com
|
|
|
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
