Are you ready? 

Is my business ready for franchising? This is the most common question that we receive at The Franchise Builders on initial calls with potential Franchisors. In fact, when most Franchisors calls us for the first time, that is all they really want to know; whether we too agree that their business is ready to benefit from a franchise model for expansion.

Similarly, I begin our first conversation with the same goal and we proceed with the qualification process by my asking a series of questions to make this determination. We will discuss topics such as how long the business has been operating, where the business is located, whether the business has moved or has ever operated in other geographic areas, whether it is considered a “local” favorite, and more importantly, what is considered the most compelling differentiators that make the business competitively effective against other businesses in the area and the same
industry.

Additionally, we would explore what the expectations were for the long-term success of the business, and discuss whether it is probable that the business could maintain its success perpetually, or is susceptible to certain industry, competitive, regulatory, cyclical, or other external or internal threats. Oftentimes, business owners will refer to industry shifts, regulatory challenges or market maturity issues for fueling their desire to franchise their business and shift its growth and risk to external parties. Too often, when owners know or sense that their business is in decline, they look to franchising as either a last-ditch effort to continue their businesses expansion, or as an exit strategy, facilitated by third-party investment.

On the other hand, many businesses are doing terrifically well and the owner is looking for options to expand their business without being directly tied to the day-to-day operational requirements and/or having to personally fund the expansion effort.  Put simply, some owners have done an outstanding job building exceedingly successful businesses, but are simply “burned out” from the repetition of the operational aspects of operating their business. Further, they are looking for retirement and wealth creation beyond what is possible by their direct work efforts at the business’ current location(s). These are among the best franchise prospects.

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