Business Franchising: Is Your Small Business Ready?

If you’re a business owner looking to expand your business, it’s likely that you’ve considered a lot of options on the table –small-business-franchising and one of them might be business franchising. Of course, deciding whether or not business franchising is for you can’t be decided in a snap. If you feel as though you’re stuck in this question, perhaps this article can give you the nudge you need to make a choice that can hopefully steer your company towards the right direction.

If you feel as though franchising might be for your business, it might be important to look at a few statistics first. Interestingly, according to data, there are around 3,000 franchisers that are operating in the United States today – and there are over 900,000 franchise businesses in the country. These franchises have helped generate over $2.1-trillion worth of revenue to the United States economy, as well as 18-million jobs. If these numbers interest you, perhaps turning your business into a franchise might be worth the risk – or is it? Here are a few things you should consider:

  • Is your model working for you? One of the most important aspects of franchising a business is to first of course prove to yourself that your business’ model is actually working. While there’s no law (yet) that requires a franchisor to demonstrate the competence of their model, knowing it works gives you some practical considerations in order to appeal to franchise buyers. Of course, to establish credibility to your potential customers, you need to make sure you have a successful prototype in operation.
  • Is this something you’ve researched? Places like The Franchise Maker can share important aspects of the entire franchise creation process because there’s more to creating a franchise than just starting an expansion of your business. Going in blind will hardly do you any good, and it’s recommended that you start researching other franchises in the same industry or similar industry and observing their model before proceeding with yours.
  • Is this something you can sell? Aside from an effective business model, an important aspect of your potential franchise’s success is to make sure it’s actually something you can sell to franchisees. It’s difficult, of course, to define and quantify terms such as “salability,” although things such as brand popularity, uniqueness, and credibility contribute if your business can “sell” as a franchise.
  • Is it something you replicate over and over again? Another important indicator of your franchise’s potential is if you can actually replicate your franchise. If your concept will only work in a particular location, because of a particular person, or because of a good team, then you’re very unlikely to succeed. A good franchise is one that can ideally be simple to operate and function and can work in a variety of locations and markets. Of course, franchisees will be better with special skills, but that shouldn’t be a requirement for a successful franchise. The business model should be readily duplicated and easily teachable.
  • Is the franchisee someone you can give an adequate return to? A franchisee is defined as an operator-owner who will be operating your business and expect a return based on the profits. If you want a successful franchise, it should be something that could work and at the same time allow the franchisee to still get returns or sales.
  • Is this something you have the capital for? Another important question to ask with regards to franchising is if you actually have enough capital to start it. While franchising is quite low-cost in terms of your expansion options, it’s still going to cost you. Manuals, legal documents, marketing materials, and training programs are just some of the things you have to spend for if you want an efficient franchise system in place.

Conclusion: Franchising For Expansion

Deciding if your business is ready for franchising isn’t something that you can answer in a snap, especially if you haven’t ever tried transforming a business into a franchise before. There are certainly perks towards franchising your business, but there are a few catches you should consider as well. The above has hopefully given you a bit of a brief look and a short bird’s eye view of the things you ought to consider before making the decision to make your business into a franchise – and remember, in the end, it’s all about the vision you have for your business and if you’re willing to take the risk for such a transformation.

 

 

 

 

 

About Cedric Errol

Cedric Errol loves writing about various niches, including business and finance, and this shows even in his works as a contributor for The Franchise Maker. His penchant for creative and imaginative pieces reflect with the voice and tone he uses with his articles, which he hopes transforms otherwise mundane topics into interesting and entertaining things to read. He loves reading when he has free time.