Is your Business ready to be Franchised?
A good number well established businesses are confronted with the challenge of growing their business beyond its existing limits whether it be geographic or because of financial or human resources. The franchise route is often considered in view of the fact that it’s a well-known method of expanding your network without needing to take on the direct overheads of running additional business owned outlets.
One of the main benefits of turning your business into a franchise is the expansion possibilities it can offer you with. A franchised business can typically develop much more rapidly than a company handled development because its not so reliant on drawing on company resources to fund and staff each extra store. The franchisee takes on the responsibility for investing in his/her outlet and covering its running costs. This tends to facilitate a faster network development process.
The main consideration is whether the business model you have will essentially work as a franchise. If the company carries a main set of principles and methods which can be identified and packaged, then franchising could be a viable course for you. If the existing business is extremely reliant upon the personal expertise and talents of the key individuals who own the company then it could be more tricky to reproduce. Nonetheless, this doesn’t automatically mean it wouldn’t work as a franchise business if one can identify and detail the primary skillset and talents that a franchisee would have need of.
One of the draw backs, may be the revenue potential. Given that you don’t own the individual outlet, the income potential you will receive as a franchise brand owner is usually a portion of total earnings, most often referred to as the Management Fees. The total turnover of each outlet will not be yours to manage but rather, you take a royalty for being the controller of the brand and supplying on-going backup and support, brand marketing and advertising if it so applies to your business.
You will need to look up the services of a competent franchise consultant that can assist you to determine if your organisation has reached a level that is mature for being franchised. In addition to determining if the business is franchise-able, you will also need to think about the matter of when. Based on the maturity of the current business, it could already be at that place or maybe you will have to get a few more years of profitable trading under your belt. Either way, it’s going to be important to speak with a franchise advisor who is knowledgeable about the complexities of taking your present venture and turning it into a franchise-able prototype. Might now be the time to franchise your current successful business?