If you are a small business owner thinking about expanding your business through franchising, you will have to answer the quintessential question–Should I franchise? Franchising is a huge jump for business owners and not without its risks. If you only have one or two stores now, then that is a sure sign you are not yet ready to franchise. But if you have multiple locations and want to expand exponentially, get ready to dig in for the long haul, and review this quick checklist to find out if you are a good candidate for becoming a franchisor.
The Potential Franchisor’s Quick Checklist :
1. How Strong is Your Budget?
It takes capital to franchise. Successful chains always begin by investing in concentrated areas near HQ in order to gain brand recognition and to squeeze value out of every marketing dollar. This creates specific market penetration. Be careful to protect your budget by offering franchises close to home the first year or you could find yourself exhausting resources trying to provide support to long-distance franchisees.
2. How Efficient is Your Business?
Once you decide to become a franchisor, understand that you will be balancing not one but two businesses, your core business and the franchise. Plan for growth and then grow into the plan. Technology is constantly changing and is a necessary expense that makes business duplication easier. Streamlining now will make it possible for you to function more efficiently later.
3. Have You Done Your Homework?
Have you remembered to protect your intellectual property with a trademark? Have you done a feasibility study to see if franchising makes sense for your line of business? Are you filling a specific demand that you can sustain through multiple stores? These are important first steps before you hire a good consultant or franchise attorney. Make sure you call references before you commit.
4. Do You Have a Niche?
There is a lot of competition out there. The Big Boys have captured the lion’s share of the market in just about every sector, so your goods and services have to be special, or at least good enough to be sustainable in places where large franchisors don’t go. Try to offer something that hasn’t been done before or that you are doing in an exciting new way. Make sure to check out the competition before you jump in. Hard work and sweat equity have gotten you here. Failure is not an option.
5. Are You Willing to Work?
You are the leader. Your franchisees are counting on you to provide them with the tools and the templates they need to duplicate what you have already achieved. You have to be willing to invest your time, your money, and to leverage all your resources, intellectual and otherwise, to insure that your core and franchise businesses stay healthy. This is a long-term commitment. Make sure you are mentally and physically ready.
6. Are You Willing to Listen?
Successful people have learned to ask for help from other successful people. They are willing to submit to mentors and to hire experts. Invest in educating yourself, follow directions, ask questions, and seek help from a trusted advisor, in fact, use more than one. Becoming a franchisor is a big step and you should never do it alone. Do your homework before you venture in. You owe it to your future team and you owe it to yourself.
By: Don Daszkowski http://franchises.about.com