Is Your Business Franchisable?
How can I franchise my business? Most business owners ask themselves this question sooner or later.
Here are the critical questions that will help you decide:
First off, are you successful? Most people buying a franchise need to earn $50,000 per year or more if they work full time. If your current business does not provide returns at that level, it may be too soon for you to franchise.
Second, are you established? It’s best if your prototype unit has been open for at least a year. It’s even better if you’ve been open for three to five years or more but, like most things in business, there are exceptions to every rule.
Next we should ask, can your business be documented and taught to others? If your niche relies a great deal on artistic, musical, or other personal talents, it may be difficult to convince buyers to invest in your franchise.
Is there a broad demand for your product or service nationwide? Some businesses, like regional food concepts, may not play well outside of the region. Naturally, a franchise offering the sale or rental of snow skis and ice skates would probably not do well in Sun Belt states.
Is it easy for end users of your products or services to see the difference between your offerings and those of your competition? Are there distinctions in quality, price, delivery time, durability, or other factors that will be helpful to your franchisees in establishing themselves in their hometown?
Can someone with little or no knowledge of your niche be fully trained on how to open and operate a clone of your unit in less than a month?
Does your business model provide a good return on investment? In other words, does someone have to invest $500,000 in order to earn $50,000 a year? Typically, a new franchisee would expect to make 20% of their investment each year if they are devoting full time to the business.
Have customers asked if they can buy a franchise in your system? Sometimes having a “pre-sold” prospect will make that first sale easy.
Do you, or someone on your staff, enjoy teaching, coaching, and mentoring others? A good franchise system relies heavily on the training and support provided by the home-office.
If your answers to most of these questions are positive, you have a high probability of being successful in franchising.
Close this page to learn how The Franchise Doctor can help you--Quickly and Economically.
