Is your business Suitable for Franchising?
The success or failure of a franchise venture can be traced back to the initial planning of its development. FDS Founder and Managing Director Roy Seaman reflects on how you should consider franchising your business
Just because you own a very successful business does not mean that you could, or should, successfully franchise your business. In fact, some businesses may not even get over the first hurdle, no matter how successful you have been in creating the business. Ask yourself this: is it a business that can be taught to others and do you and your team have the ability to achieve this goal?
Ideally a franchiseable business should be substantially different in a number of ways from competitors in the same sector. You will need to have in place a well-proven and clearly documented methodology in relation to promoting, selling and then delivering the product or service in order that others can replicate your success.
Once you have these systems in place, you will be required to train and support franchisees in learning and adopting them. You will be responsible for helping a large number of people to replicate your success and earn a really good living by following your advice and guidance. These people are going to expect you to help them far more than you think! Ideally they would like you to be working alongside them for at least the first six months of their business - if you cannot do this then you will need to create a team that can be your best possible substitute.
Now take a moment to evaluate your market. What is the total value of your marketplace? What percentage of that market can you and your network of franchisees realistically expect to capture in the next five years? Are you in a position to take advantage of whatever trends may occur in your market? Franchise investors need to be able to make a good return on their investment of time, effort and money after paying the management service fee for the ongoing assistance of the franchisor.
Consider what sort of people are likely to apply to own and operate your franchise. When you promote the availability of your franchise with some attention-grabbing headlines, expect applicants from all walks of life and with varying amounts of capital, ability and enthusiasm. They have responded to your heading - yes, they would like to become a franchise millionaire and are going to rely on your franchise to achieve this goal. You will need to lay out a set of requirements for franchisees to ensure you get the right people representing your company.
Creating a successful franchise operation takes time. There is no substitute for experience in any business and if you do not have it you need to buy it in. When starting a franchise you are in effect creating a new business - that of franchising your existing business. You will therefore need to think about the additional resources that you will require for this new business very carefully.
It will require a great deal of your time, thought and dedication. However, there is often no better way to expand your business and obtain the very best return on all of the knowledge that you have accumulated, since it is that knowledge that you are going to be selling to your prospective franchisees wrapped around the product or service that you have to offer.