Determining whether your business can be franchised is a deeply detailed and personal assessment. You must strive to set up a winning franchise for the franchisee, as well as for yourself. These 10 factors can help you decide whether your business can successfully become a franchise.
1
Financial Security
Franchising is a low cost expansion method compared to other methods; however the cost is still there. You need to ensure that you have the capital needed to roll out and maintain a franchise program. During the roll out there will be costs associated with legal fees, state registrations, manual creation, training costs and personnel. All of these fees must be planned for and secured prior to beginning the franchise process. These fees can range from the tens of thousands of dollars to the hundreds of thousands of dollars depending upon the size of roll out desired.
2
Reliability
Your business must be viewed in the public’s eye as reliable. However, different people view reliability differently. You may be viewed based on your businesses publicity, awareness of the brand, size, sales or years in operation. If you are solid in all of these criteria, you will typically be viewed as a “reliable” brand.
3
Reasonably Priced
You must be priced affordable to your target market. If the franchise requires a lot of extensive training, licensing, permits and assistance in opening the business then it should be worth more. However, if the franchise is a mall-cart type business selling jewelry, the pricing should reflect that as well.
4
Teachability
You must be able to teach your franchise system to others. This includes having documented systems, effective training and thorough training manuals. These techniques must be able to relay the business practices, procedures, and policies in an easy to use format.
5
Solid Management
You must have personnel with adequate experience at the management level. Delegation is critical. You must exhibit a depth of expertise in your field. You cannot be bogged down with the small details. This is one area that owners cannot handle it all. You may have been able to start your business by yourself, but you cannot expand through franchising by yourself. If your company has not grown enough to have delegated specific duties to each area of franchising, you will be better off waiting to launch the franchising aspect of your business until you have grown enough.
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