You are the quintessential entrepreneur. You took an idea, fleshed it out, created a business plan, found the ideal location, threw open your doors to the public, and built a successful business.
Things are going so swimmingly that you're now thinking about expanding.
So what do you think about franchising?
Perhaps you've entertained the idea of opening up a second site for your business, but are discouraged by the idea of shuttling between shops every day. Or maybe someone has approached you and shown interest in being a part of your company, but you aren't willing to assume the risk of taking them on as a partner. In these scenarios, franchising might be the solution that is best suited for you.
Here are some suggestions for entrepreneurs who want to turn their solitary business into a franchise:
Do due diligence.
As an entrepreneur, you know the importance of executing due diligence with regard to your own ideas. You've probably already done market research and cost analyses to establish the viability of your initial idea. And you would have to go through a similar process to see if a second location would make economic sense.
But you should also perform the same level of due diligence when it comes to your potential franchisees. Do they have any expertise in your area of the marketplace – or any business experience at all? What is their track record with similar ventures? Don't be afraid to ask tough questions and request specific financial information from anyone who may be interested in franchising. The last thing you need is to have your brand tarnished by someone who is incompetent or untrustworthy.
Let the experts handle your expansion.
Unless you are well-versed in construction and/or commercial real estate, do not try to save money by building another site on your own. Hire a general contractor to be responsible for all of the details from building erection and remodeling to plumbing and electricity to interior details. Many entrepreneurs have lost substantial productivity (not to mention their sanity) trying to run their business while navigating the minefield of overseeing expansion on their own.
Also, be sure to determine what precise parts of your business need to be duplicated exactly at the new site. Some aspects of a new location are generic; but if some of your company's core competencies involve a specific layout, floor plan or piece of equipment, make sure your contractor knows before work gets underway. Otherwise, you face costly remodels and delays in your expansion plans.
Train properly and document everything.
No matter how proficient your franchisee is, he or she is not a mind reader. So you have to develop a meticulous training plan not only for the employees at the new location, but also for the franchisee. This plan must thoroughly educate workers and managers about your business model, ideals, and goals.
To assist in this course of action, you should create a manual of policies and procedures. This will not only standardize all of your processes for your franchisee and his or her employees, but will also serve as a guideline for any future franchising plans you may undertake.
Be open to learning new things.
If your franchisee is skilled and experienced, he or she will probably have some ideas about how to improve your core business. Don't assume that just because you created the business that you are the only one qualified to change or improve it. This narrow-minded view (or arrogance in some cases) effectively ignores a prime source of mental capital for your entire endeavor.
Franchising certainly isn't for everybody. But as an entrepreneur, if you choose this option to expand your business, be sure to do it the right way.