In my over three decades of experience as a franchise consultant, I am often asked how to determine if you should franchise your business. Here, I will examine some of the ways to evaluate your business to determine if you are a good candidate to franchise your business.
- The first question to answer when deciding whether to franchise your business is has it been around for a while? Unless there are very special circumstances, at National Franchise Associates, we recommend you have at least one year of successful operations under your belt. A shorter history of operations often makes it more difficult to convince others to invest in your concept because it is perceived as not fully proven.
- The second issue to examine is if you have made mistakes and corrected them. Opening and operating a business involves mastering a learning curve. You must be able to recognize missteps and turn them around. When you franchise your business, the fine-tuning process never stops. As your business grows through franchising, you must be able to react to, for example, changes in the marketplace, emerging technologies, developing marketing outlets and new competitors. You must maintain your company’s ability to react and evolve.
- A third gauge for future success when you franchise your business is your company must be profitable. If your business is not making money, why go to the trouble of franchising it? Franchisors seldom prosper unless they can teach others how to achieve success through their business system. Why would anyone stake their future on a business that is not profitable? Your Franchisees must be able to pay their bills.
- When deciding whether you should franchise your business, a fourth consideration is your Franchisees’ potential for a strong return on investment. In franchising, there is a tremendous range of costs involved to open a franchise. Some franchises require an initial investment under $50,000; others may cost millions to launch a location. Rather than looking at the initial investment, we at NFA recommend you use the anticipated return on investment to evaluate a franchise program’s viability.
- A final issue to review in deciding if franchising your business is right for you is whether your franchise can operate in a commercially viable manner. For example, you must determine if your business needs a reasonable number of employees, requires a realistic training curve to make these employees useful, possesses a good likelihood of repeat business and other issues.
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.