Should I Franchise?
I have a successful breakfast and lunch business I’d like to expand. So the obvious question is should I franchise my business? I know that I have to prepare paperwork (contracts) and meet certain legal guidelines. I’m also smart enough to know I need help. But the obvious question before I start spending money expanding is once again, should I do it?
Keys To Franchising Your Business
Although you have a service business that is profitable, franchising is not necessarily a wise decision. First, franchising, while a well known and accepted means of expansion, is simply one of many channels of distribution. Partnerships, affiliate programs, distributorships, and company owned units are all viable expansion tools. The main sub-questions under ‘should I franchise my business’ are the following.
1. Am I Franchise Material?
Do you want to control your expansion under your ownership or are you willing to take on other people and their personalities as part of your brand? Most don’t think about it until faced with the concept of ‘people’ and the layer of responsibility that means. What’s easy for you as an independent owner will be disrupted if you have a franchisee with whom you don’t get along. Just accept that franchise relationships are a major concern to franchised networks and bad relationships can ruin your business and your life.
2. Is My Business Franchise Material?
Can your business be operated ‘successfully’ by other people? Or is it successful because of your connections or any special considerations that make your business one of a kind? Of course most people could learn to run a breakfast and lunch concept, but what if your location is something very special? What if it’s a landmark? It’s not just you, it’s the business that must lend itself to franchising.
3. Do I Have Good Systems In Place?
How good are your systems? Only proven, up to date systems are good candidates for franchise development. We have written extensively about franchise success or failure and the requirements of a proven model and a thorough feasibility study. Read our articles for information on sidestepping some of the potential pitfalls, such as unproven systems, that new franchisors inevitably face. Now, please be warned: many franchise consultants would be delighted to take your money for helping you launch a franchise company, but with little regard for sound franchise development. Franchising is only as good as the system being cloned.
4. Can I Answer These Questions?
The most important precursor to franchising is and should be franchise feasibility. If you have doubts, ask questions and ask for help. It’s far less expensive to conduct a study with expert help than to franchise without paying attention to caution signs. Bibby Group was the very first consultancy to demand a franchise feasibility study covering not just the business but the person. While other consultants talk of feasibility, in reality it can result in nothing more than a pitch to franchise. A consultant should never give a green light to franchising unless they’re a paying partner on the project. Perform a legitimate feasibility study and you’ll get the answer to ‘Should I franchise my business?’