In my over three decades experience as a franchise consultant, I am often asked “When franchising your business, what are some of the most important considerations?” Here, I will examine one of those issues.

When deciding whether franchising your business is the right choice for you, examine these five areas:

  1. Evaluate your concept: If you are considering franchising your business, determine if it is something that others want to operate. Can you teach someone else how to do it? Is it a business with a short-lived demand or does it have staying power?
  2. When franchising your business, think about the initial investment: How much did it cost you to open your business? Do you expect the initial investment for a franchisee to be approximately the same? If not, what do you think the initial range will be to open a franchise location?
  3. Think about what kind of sales and profits your franchisee can generate. Will a well-run franchise location make enough money to make the entire exercise worthwhile from the point-of-view of the franchisee? Here, it is often helpful to look at the prospective franchisee’s return on investment.
  4. If franchising your business, what kind of money can you anticipate generating as a Franchisor? There are various possible sources of income to Franchisors, including Initial Franchise Fees, on-going royalties, profits from sales of equipment, supplies and/or products to franchisees, income from real estate deals, possible income from providing financing, and other potential sources of revenue. Income from a single franchise can be substantial. For example, if your average franchise generates $1,250,000 in annual sales and pays a 6% royalty, as a Franchisor you will receive $75,000 per year per location in royalties alone.
  5. When deciding the advisability of franchising your business, you may want to contemplate whether to make any changes to your current business model to make it more “Franchise-able”. For example, you may simplify the services or products offered or streamline your operations. If you decide that franchising your business is right for you, the franchise development process is an excellent time to fine tune your program.

Thinking About Franchising?

NFA Franchise Consultants have the experience to help businesses franchise.  Just watch and listen to some of our client case studies and video testimonials.  We can HELP YOU and it doesn’t cost anything to call and talk to us! 

So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form.  We look forward to helping you take your business to the next level and beyond.