Franchising can take your business far and wide.
Thousands of entrepreneurs have chosen franchising as an ideal way to expand. Who can blame them? The vision of having your business’s name spread across the nation–maybe in every city, or even on every corner–has lured many a successful entrepreneur to the land of franchising. And the benefits don’t end there. Since your franchisees are responsible for the investment of each operating unit, they basically bear the cost of expansion. Also, franchisees are highly motivated–much more than employees–because they’re investing their own capital in the business.
So you think you’re ready to enter the world of franchising? Here are a few tips.
1. Make sure your business is “franchisable.” The first issue you need to address is whether your business is salable as a franchise. Ask yourself: Have I received legitimate inquiries? Is the business model unique? Do I have a point of differentiation? The business must also be replicable. That means it can’t rely too highly on your personal involvement. Finally, and most important, it needs to offer a potential financial return that will allow a franchisee to generate an adequate return even after paying you a royalty. If you aren’t comfortable addressing these questions, speak to a franchise consultant about whether your business has what it takes.
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