The big question: Should I franchise my business?
Should I Franchise My Business?
I ran across your site while investigating franchise consultants. I have a successful small business as a mortgage loan originator and I’d like to teach others. So the obvious question is: Should I franchise my business? I know that I have to prepare paperwork (contracts) and meet certain lawful guidelines. I’m also smart enough and modest enough to know I need help. But the obvious question before I start spending money expanding is once again, ‘Should I franchise my business?’
Keys to franchising your business
The entrepreneur’s nagging question is ‘Should I franchise my 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.
Am I franchise material?
One, do I want to control my expansion as a sole proprietor or am I willing to take on other people and their personalities as part of my brand? That may seem like an obvious question, but most never think about it until faced with the concept of ‘people’. What is easy for you as an independent business owner in terms of decision making can 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.
Do other people belong in my business?
Two, can your business be operated by other people? Or is it successful because of your connections or any special considerations that only you bring to the picture? If a business is successful due to the peculiarities of one individual it should not be franchised.
Do I have good systems in place?
Three, how good are your systems? Only proven systems with current market viability and acceptance are true 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. We encourage you to 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. But it would be a waste of time. Franchising is only as good as the system being cloned.
Is franchising feasible?
Fourth, and most important is franchise feasibility. Bibby Group was the very first consultancy to demand a franchise feasibility study. Now, as is the case with many of our practices, other consultants talk about feasibility, but if you looks closely, their feasibility is a cover for selling prospects on the idea of franchising. We believe that consultants should never give a green light to franchising. Therefore, we use feasibility as a spotlight to show potential pitfalls and never as a sales tool. In fact, we’ve never told anyone that they should franchise. Perform a legitimate feasibility study and you’ll get the answer to: Should I franchise my business?