I want to learn how to franchise my business. How does one franchise a business? -- that's one of the most common franchising questions we get. The power of franchising's organizational and financial leverage can unleash incredible business growth. Here's how to decide if franchising is right for you.
Many successful small business owners look to franchising as a way to expand their business.
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For some business owners, franchising does, in fact, offer the most effective avenue for growth. Others, however, jump into franchising too quickly and the results are devastating.
So how do you know when it's time to franchise? You begin by asking the right questions about your current operation.
Is my business successful?
Franchising is never the way to turn around a sagging business. With that in mind, the first question you need to ask is whether or not your business is successful. If it is, then franchising might be a good option for future growth. However, if the business is experiencing a downturn, then now is definitely not the right time to franchise. Instead, put your franchising plans on hold, at least until you've been able to determine the reason for the downturn in your current operation.
Have I successfully reproduced my business model?
Franchises succeed because they are able to effectively reproduce an existing business model over and over again. There's really no way to know how effective you will be at doing that until you've given it a shot yourself. If your goal is to launch a successful franchise, one of the first things you need to do is to open multiple locations of your existing business. This will give you the opportunity to assess your ability to reproduce your business model and give you time to fine-tune your system before you offer it to other franchisees.
Is my business "franchise-able"?
Not every business is capable of making the transition to a franchise. Some businesses succeed because they fill a market niche in a specific geographic location. Although this is profitable for your operation, it might not be profitable for someone else in a different market. Again, the best way to learn your business' franchise potential is to open additional stores in different markets. If your other locations succeed, then your business concept may have long-term franchise potential. But if they fail, it might be time to go back to the drawing board.
Can I document my success?Your capacity to sell franchises will be largely based on your ability to document your success. Even a well-conceived franchise will fail unless you can provide potential franchisees with hard numbers indicating they, too, can achieve profitability. If the timing seems right for franchising your business, have your accountant run the numbers and compile them in a way that can presented as part of a more comprehensive franchise information packet.
Am I ready to franchise?
The most important question to ask yourself is whether you and your business are ready to franchise. The decision to franchise will have significant consequences for your company. It will require much of your time and energy, as well as the time and energy of your senior employees. Unless your business can survive without your constant attention, then it might be best to put off franchising, at least for a time.
Want to Learn about Franchise Opportunities?
Browse tons of franchise opportunities in the Gaebler Ventures franchise directory: