Things you must know before Franchising your business?
Who does not like the idea of a growing business and expanding territories without even spending a fortune in capital investment? Well if you are running a thriving business and have tasted the flavour of success, then franchising might seem to be the most alluring option for you to explore.
Franchising has earned the crown of being the best feasible way to rapidly expand a network. Its ceaseless perks including faster growth, strong brand recognition, dedication and commitment of an owner-operator, shared capital, local contacts and expertise, marketing bonanza, de-risking business among many others make franchising a tempting bait.
However, despite this big bouquet of advantages, not all franchises see the dawn of success. Each year thousands of franchises sprout from the seeds of start-up ideas hoping to achieve the feats of Subway or McDonalds but only to be shut down within a year of realising all the potholes along the way.
So, what’s the deciding meter that sets the destiny of one into a trending story and another into another lesson from failure? There is a lot more to this fascinating charm from franchising. From analysing if franchising is a suitable model for your business to strategising the model for better replication; it is a process involving some hard math.
So, here we have listed the lesser known facts you must know before putting your bet on franchising your business.
Is franchising the right option for your business?
No doubt franchising is an enticing option, but does it fit the criteria to propel your growth aspirations. Every business is unique and so is its working module and targeted goals. It is very important to understand the world of the franchise and scrutinize deeply if this model really suits your business. So, the first question, to begin with, is – Is my business franchisable.
Check out by answering the following questions:
- Have you gained enough expertise and experience in your business?
- Is your business earning a good profit?
- Have you expanded your base to more than one locations successfully?
- Is your business model replicable?
- Is the business easily teachable?
- Do you have provisions to provide training and support?
- Have you applied for patenting your model?
- Can your business offer a quick return on investments?
- Are there other franchise competitors in your field?
- Have you tried operating your business from multiple locations?
Before entrusting others with the job, it is always better to taste the water once. Most successful franchises have opted for this option after establishing seamless operations from multiple locations. These companies have more experience, capital and human resources which comes handy while extending through franchising.
Can you bear the costs to Franchise Your Business?
Franchising is a “low cost” means of expansion; not a “no cost” means of expansion. Contrary to the popular myth that franchising is all about convincing others to chip in, it does need some solid capital from the franchisor.
Do you have a precisely documented process in place?
The moment you step out to franchise your business, everyone would ask you the papers of your processes. A well-documented training program sorted legalities, competent staff, and organizational procedures everything must be on paper.
Protecting your image
The moment you hand over the responsibility of your brand to an ally it becomes very crucial to monitor their actions and guide them throughout to keep up the reputation that you achieved. With comprehensive training, access to a detailed operations manual, and regular marketing support this can be assured.
The franchise agreement
This is the certificate of your franchise, the bond tying the franchisor and the franchisee. A clear crisp easy to understand agreement is what lays the foundation of this relation and as we all know a strong franchisee-franchisor relation is an ultimate key to franchise success