Does your business have what it takes?

The pages of this magazine are awash with finalised franchise offerings – all of which started life as an idea. What you do not see, amongst all the state-of the art logo’s and dazzling designs, is the years of research and development that make up the mechanics of a solid franchise offering. Gareth Samuel reports on exactly what it takes to turn a good business into a great franchise.

The adverts are, in effect the last piece of the jigsaw that makes a complete franchise opportunity. Successful franchising requires the accurate consideration of the personal factors as well as the legal agreements and monetary issues surrounding a business. It is a process not to be taken lightly, but the rewards can be substantial. In order to franchise successfully, there needs to be certain factors in place in any business.

Corporate Identity

A business that will lend itself well to franchising needs to have a clearly defined image and system of operation. This includes registered trademarks, structured corporate identity and a personality about the operational practices of a firm that make the business what it is. A Franchise Manual is a must for any successful business looking to expand through this unique method. It contains all of the operational procedures for new franchise owners to follow and replicate in their new territory.

Duplication Potential

A business’ practices must be able to be duplicated by new franchise owners coming into the company from different backgrounds. Franchising is effectively the licencing out of a concept or idea and so it is important that this idea can be easily taught to investors. If your business is one that can only operate in a limited number of sites for whatever reason, for example a logistics business that needs excellent road networks, then it may be difficult to sell franchise units around the country because of infrastructure limitations.

Enough to go Around

Franchising is a relationship like no other, – in order for both the franchisor and the franchise owner to make significant income, there need to be enough profits made to share between the two. It is, therefore, vital for the franchisor that the franchise owner succeeds in the territory in which they invest.
When studying the feasibility of franchising, it is crucial to do accurate accounting, making a sound judgement on whether the business really does make enough profit to be split between two parties and whether this profit can be replicated elsewhere. The eventual goal for any franchise owner is to develop the business, take a reasonable wage and build on an existing territory using the profits earned. Consider whether your business currently would be able to grow if a percentage of the profits had to be paid as a Franchise Fee. This reflection is a good indication of the projected success of your business as a franchise offering.

Proven Model

The franchise owner is paying for a business model that works, therefore you need to prove that it works. If your business, at the moment runs smoothly and is continually growing, then it is likely that you have created a business model of value. The best advert for your franchise is your own success. Therefore, when looking at expanding by franchising for the first time, it is important to reflect upon whether you would invest in your own business from an outsider’s point of view. When you have your first franchise owner operating independently, you must expect to run this branch at arm’s length – a new franchise owner will be mirroring your business practices exactly. These criteria are essential for successful franchising and without them, it is likely that your business will not be suitable or may need sufficient improvement in these key areas to make it a viable and an attractive proposition for franchising.

Talk to the experts

Setting your business up as a franchise, whereby units are available for investors to buy into, is no small feat and the chances are, unless you have had experience with the system in the past, it is a whole new sector for you.

There is an abundance of information available online, on sites like, that can help you to make the right decisions, learning from people who have been there and done it. However, for a bespoke service, there is no better way forward than through the commissioning of franchise consultancy.

Once your business is in a position where you believe it could be an attractive prospect for potential investors, setting it up as a franchise requires work. Good franchise consultants will look through your business with a fine-tooth comb, clinically categorising and summarising operational procedures to produce a visually stunning and totally informative prospectus.

They will help you allocate locations through territory mapping experts, create comprehensive and accurate franchise manuals, set up lines of communication and decide exactly what a new franchise owner will receive for their investment.

If your business has reached a point where it is time to expand – franchising is a system that could allow you to expand quickly and securely – and one that has worked for a spectrum of brands in different sectors. If your business has all the ingredients to grow exponentially, franchising may well be the best recipe for unparalleled success.