Can We Franchise Without Investors?
We have a takeout food business that is doing very well. People have approached us about helping us franchise and taking part of the business. 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 seem to think they need hundreds of thousands of dollars of a team of investors to initiate the franchising of their business. While most come to understand that so much money is not required to start franchising operations, some continued to believe that major investors must be secured before franchising can begin. It’s just not true.
Here’s Why & How A Business Can Franchise Without Investors
First, conduct an adequate, and legitimate, feasibility study is not terribly costly, at least with us. But it should be demanded, and it could save you from the biggest sorrow of your life if franchising is potentially 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. But, for the shrewd entrepreneur, investors generally are not needed. While team members will be added over time, you can franchise without investors and build according to a proper schedule.