Franchising A Business? Thoughts To Consider
Franchising is complicated. There are a lot of moving parts.I have a successful breakfast and lunch business I’d like to expand. So I keep asking myself if I should 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 successful business, 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 to ask under ‘should I franchise my business’ are the following.
1. Am I Franchise Material?
Do you want to expand 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. Owing other units allows you to control management. Franchisees are not your employees. 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 the business one of a kind? In your case that may not be a problem, but what if something very special is attached to your location or to you? That can’t be repeated.
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. Otherwise, they’re just looking for a fee. Perform a legitimate feasibility study and you’ll get the answer to ‘Should I franchise my business?’ Further questions? Read our take on franchising a business and call if you have other concerns.