As a franchise consultant, I’m often asked “What mistakes should you avoid when you franchise your business?” Here are some frequent missteps when you franchise your business:
- Selling a franchise just to generate money
- Ignoring prospective Franchisee red flags
- Franchising your business simply to get out of a financial hole
- Spreading franchises too far apart
- Not getting to know the prospective Franchisee well enough
- Overselling your franchise opportunity
In my previous blog, I addressed mistakes three and four above (a) franchising your business simply to get out of a financial hole and (b) spreading franchises too far apart when you franchise your business. In this blog, I will address mistake five.
Not getting to know the prospective Franchisee well enough when you franchise your business: It is incumbent upon a new Franchisor to get to know a franchise prospect before granting him or her a franchise. When you franchise your business, your success as a Franchisor is dependent upon the success of the first few franchises. If franchise locations #1 and #2 fail, it will be virtually impossible to sell franchises #3 and #4.
Because your Franchisees have a big impact on determining your success when you franchise your business, you must get to know them before granting a franchise. They must have the necessary values, work ethic, financial resources and experience to do well in your franchise concept. They must be willing to follow your system. If not, their chances of succeeding are substantially reduced, negatively impacting the overall viability of your franchise program.
Remember, when you franchise your business, you must list all current Franchisees in your franchise legal documents as well as any Franchisees who left your system within the past year. Unhappy current or former Franchisees make it difficult, if not impossible, to sell additional franchise locations when you 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.