Is your Business Franchisable?
With the numerous advantages of franchises, it is the hope of many to turn their business into a franchise and see it expand to different cities, states and even countries. It is of paramount importance, however, before you venture this way, you are fully aware of the qualities your business should have to make a successful franchise.
Your business should have been in place for enough time to guarantee a certain level of trustworthiness by the people you are supposed to serve. It should be a tried and tested model that people now look up to and rely on. It should have the capacity to weather some storms if at all they come. Also, whether your business recognizable? How good is your brand with the locals?
For your business concept to succeed as a franchise, it needs to be something fresh and uncommon. You can be coming up with the same drain cleaning business that several others in the same city have. But for it to be potentially successful and to be able to get funding and potential franchisees, there has to be some one-of-a-kind thing in your drain cleaning business. Maybe you have special equipment that no one else has. No one is prepared to join a common business idea because the competition would be stiffer, and failure chances are more.
Look at your business with the eye of a stranger and analyse how lucrative the business really is. If it was someone else’s business and you wanted to buy a franchise; would you buy it knowing its current state of rewards? If you hesitate, then it is not profitable, and you need to work at making it useful enough before you can turn it into a franchise. Getting into the franchise business should not be a way of getting out of financial difficulty. That will cause it to get worse, a lot worse.
One other part of profitability that has to be considered is the profitability of the resultant businesses. When the franchises are operating, will they be as profitable as the original business? If the business is replicable and if you as the business owner did thorough market research and are satisfied then yes, the franchisees should be as profitable as the mother business.
For your business to become a franchise, it is practically changing hands from yours to your franchisees. The more franchisees you have, the less you do the hands on work you have been doing, but you will be helping your franchisees do what you initially did. What this means is that the idea of your business should be one that you can put into someone’s hands, and they can operate it as well, or even better than yourself. If your business is such that you feel no one can run it without your assistance, then think of a different way of expansion, franchising is not your way. Your business has got to be reproduced for it to become a franchise.
You have been running your business for as long as it was born; you know the running of such inside and out. When you want to franchise it, ensure that there is room in the running of your business that makes it possible for anyone who is imparted with the know how to do it. The idea has to be something that can be instilled into others. It has to be something that one can easily explain and clarify, otherwise; it would be impossible for the exact concept to be taught to others. The training that should be done to ensure the franchisee’s business runs smoothly would not be possible.
When you analyse your business as it is would you consider it as able to sustain itself and the franchise adequately for some time? How affordable is the franchise for your business? Will you be able to run the business while at the same time planning and implementing all that is required during the transition into franchising? Remember this will include engaging the services of professional advisors, preparing all legal requirements and later the training and support of your franchisees as you assist them with the initial stages of their businesses. If you feel your business will be strained, you need to consider getting financial assistance like, getting a loan, etc. If most things are in place, a bank can give you a loan as long as see the viability of the project to be undertaken.
All the above could be in place, but it is also very important for you to critically look at yourself, your personality, desires and abilities to find out if they are the qualities needed for a franchisor. You need to be a well-respected manager for some potential investors to trust in your business. Remember some of them are putting all their life earnings in your hands and are not likely to do that for someone whose personal capabilities are not tried and tested. It is advantageous if your name was mentioned in the media or such like pertaining to your good management qualities as this will give them confidence in you.
You also have to ensure that you are ready to hand over your idea into the hands of others so that you can share in its growth, if you prefer to see it grow solely on your own then go the chain way. Your readiness to share your ideas and your success with your franchisees will ensure a good rapport between you and your franchisee.
If your business does not have these qualities, it does not necessarily mean that your business in not franchisable but could just mean it is not yet ready to franchise and that it needs more time. Do not try to force the situation because you will head for disaster. If the qualities are there, then it is time for you to go grab your chance.