A Question About Creating A Franchise
We have a takeout food business that is doing very well. People have approached us about franchising and then running the franchise company. My questions is: Can we franchise without investors so that we own everything, as opposed to having partners?
Yes, You Can Most Assuredly Franchise Without Investors!
We find it quite interesting that so many prospective franchisors think they need hundreds of thousands of dollars and a team of investors to initiate franchising their business. It’s not true.
Here’s Why & How A Business Can Franchise Without Investors
First, conduct an adequate, and legitimate, feasibility study. It’s not terribly costly, at least with us. You should insist on it. If done correctly it will open your eyes to the reality of franchising your business. In fact, it could save you from the biggest sorrow of your life if franchising is a bad idea. (Do not think the following scenario is feasibility study. A consultant listens to you for five minutes and begins selling you on franchising. Sound absurd? Nope, it’s reality.) A good feasibility study takes time and the interest of both you and the people you retain to help you. No investor is needed at this stage of franchising.
Second, franchising can be taken in steps. In fact, it should never consist of plans to franchise a state or the whole country. Proper planning takes patience. Proper franchising takes patience. While legal documents can be expensive, a successful business will certainly have thrown off enough income over time to franchise without investors.
Third, the overall cost of franchising should be affordable for anyone who has been operating a successful business long enough to demonstrate its worthiness to franchise. Our meaning is simple. Successful entrepreneurs work smart. They’re used to hands on operation of their ventures and that is what franchising requires more than investment capital. They also know that their success is a direct result of full involvement and control regarding any new venture. Therefore, just as their direct involvement in growing the business has proved successful, as opposed to giving up control to investors, they will do more in franchising with less expense and usually produce good results. We’re not coy about the cost of franchising because there are variables. The shrewd entrepreneur with a profitable business does not need investors.