Reflections of a Franchise Consultant
Stephen S. Raines
President, National Franchise Associates
Atlanta-Based Franchise Consultants
As a franchise consultant, I am often asked if a particular company is “franchiseable”. There are several questions that must be addressed before franchising your business:
- When franchising your business, can it be duplicated? There are some companies that are so unique that they are very difficult to develop a franchise concept around.
- If franchising your business, is there a consistent demand for your product or service by the general public or by a particular market segment?
- Can you teach a new Franchise Owner how to run the business profitably?
- When franchising your business, will the Franchise Owner make enough money to justify his/her investment?
- Does the concept have other benefits (e.g. working with pets, working with children, working in the travel industry) that will attract potential Franchise Owners when franchising your business?
When deciding if franchising your business is feasible, if you can answer these questions positively, then your business may be franchiseable.
Another question I am often asked about franchising your business is “How do I create a franchise program?” If you decide to proceed with franchising your business, there are a number of steps to be taken:
- Retain the services of a franchise consulting firm. Franchising is not difficult to understand, but it is complicated. Having a consulting firm working with you when franchising your business will ensure that you consider all aspects of your new franchise program.
- When franchising your business, consider all the many issues to decide in order to develop a proper, workable Franchise Disclosure Document and corresponding Franchise Agreement for your new franchise company.
- The next step in franchising your business is to develop the Operation Manuals for your franchise program. These Manuals should cover such topics as Pre-Opening Procedures, Daily Operating Procedures, Marketing, Personnel and Bookkeeping.
- When franchising your business, next develop marketing materials to send to a potential Franchise Owner.
Another frequent question is “Do I need more than one location in order to be successful in franchising my business?
You really do not need more than one company-owned unit as a prototype operation. Many companies have been successful in franchising with only one operating unit.
Another question when franchising your business is “How can I compete with an established franchise company in the same field?”
- Franchise Owners will get much more attention from a new Franchisor because there are fewer people competing for assistance.
- When franchising a business, a newer Franchisor can study the competition and create a superior franchise program.