In my over three decades experience as a franchise consultant, I am often asked “If you franchise your business, what are some of the most important considerations?”  Here, I will examine some of the FAQs that arise when you franchise your business.

Q. Why should you franchise your business?  

A. Without a virtually inexhaustible budget, you probably cannot grow your company as quickly as you would like unless you franchise your business or find compatible investors.

When you franchise your business, you can expand your concept more quickly using the money, operating skills and experience of your franchisees.  By constructing a well-structured franchise program, you can also generate considerable profits through franchising your business.

For example, if your franchises average annual sales of $1,500,000 each and your royalty is 6%, you will earn about $90,000 per franchise unit per year.  When franchising your business, you can make additional profits from franchise real estate programs, initial franchise fees and providing services and/or products to franchisees for reasonable fees.

If you franchise your business, many NFA clients easily recoup their investments in the franchise development process with the sale of a single franchise, including the initial franchise fee and only one year or less of royalties from this one franchise.

Q. When you franchise your business, why shouldn’t you simply “borrow” another company’s Franchise Disclosure Document (FDD) and Franchise Agreement and just change the company name and particulars?

A. You may think when you franchise your business that the franchise legal documents are simply forms for you to fill in the blanks.  However, as professional franchise consultants, NFA knows that building a workable franchise program that reflects the concept, benefits and values of the particular franchisor is more than simply taking someone else’s work and changing a few words.

When you franchise your business, it is important for you to protect both your interests and those of your franchisees.  Your franchise legal documents describe in detail your responsibilities to your franchisees and their responsibilities to you.  These documents encompass not merely legal issues but also important business decisions.  Making the right choices with the guidance of a knowledgeable franchise consultant when you franchise your business creates a stronger, more saleable franchise program that is more profitable for all parties.

Here are some examples of these business considerations when you franchise your business:

  • What is the size and composition of the territory?
  • What is your strategy for marketing your franchise?
  • How much is your Initial Franchise Fee?
  • What is the time period covered and the amount of your royalty or service fee?
  • What initial training program is necessary to ensure your new franchisee and his/her staff are able to competently perform their responsibilities?
  • What on-going support will your franchisees receive?
  • What are the costs involved to open one of your locations?
  • When you franchise your business, what roles can your existing employees fill?

Here, when you franchise your business, an experienced franchise consultant can lay out your choices and guide you in making the decisions that are best for you and your company.

(More in my next blog on franchise your business)

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.