What does it mean to franchise my business?
Franchising helps you distribute your products and services through an expanded network, but without the usual risks and expense of traditional business expansion. As a franchisor you will offer up training and support to your franchisee so that they can run their unit modeled on your successful and proven business plan and trademark. Franchise buyers generally offer up their own money as capital for starting a new branch of the franchise business in a new area, and maintain the everyday operation and management of their location. Franchisors often receive an initial up-front "franchise fee" for the set up of the franchisee’s business, and then ongoing royalties for the continued right to use the business model and trademark as well as receive ongoing franchising support.
Is my business a right fit for franchising?
To run a successful franchise business, you have to first be able to sell your franchises, and then have your franchisees sell the goods and services out of their unit. So first of all, the franchise business must appeal to buyers as a good business investment that they would want to choose over other franchise opportunities or business models they may be considering, and there also must be a demand for your goods and services on the market to keep your franchises profitable. Think about whether the market and demand for your products is increasing or decreasing, whether your business is one that people would pay to be associated with, and whether you have both the time and the finances to support starting a franchise without your original business suffering from neglect.
What kinds of businesses are ideal for franchising?
The franchising business model is an incredibly flexible one that can be used across the board from hairdressing salons to coffee companies to consultants. The International Franchise Association claims that up to 75 different industries use franchising as a method for company expansion. In fact, there are few businesses that cannot be franchised successfully, either through retail or wholesale, products or services, from an outside unit or from home — however, this doesn’t mean that to franchise your business is right for you as a business owner.
There are several different avenues you can pursue to get franchise advice, from franchise lawyers to consultants to franchise development companies. A quick search on the internet can turn up many different options to assist in the lengthy process of franchise development, but always be sure to do your research beforehand.
Who can I turn to for advice on franchising a business?
Make sure that you are going to a reputable source who will offer you solid franchising advice at a fair price. Also, once you’ve done your initial homework and have an idea of what you are getting into, try and get in contact with other franchisors in your area and see if you can set up a meeting to discuss the ins and outs of their franchise ownership experience.
How will I know if I should pursue franchising?
Franchising is a big decision that requires a serious dedication to growing your new franchise and working with your franchisees. You will have to work long hours and invest a substantial amount of your own money in order to get your franchise business plan off the ground, and there’s no guarantee of success. Start off by learning as much as you can about franchising a business,and research what other franchisors did to pave their way to success. Network and study the Franchise Disclosure Documents from other franchises to see how yours fits in with the rest, and whether it makes financial sense to pursue franchising your business. If you decide to take the plunge, be sure to consult a franchise lawyer and a reliable accountant to help you navigate the legalities and financials of the franchise development process.