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Chris Bell

5 questions to ask yourself before you franchise your business



Franchising has proven to be a very popular and very effective model for business growth. Franchising is a unique arrangement between parent businesses and their franchisees, offering many benefits to both parties, but it is not a silver bullet. Before any business commits to franchising and invests the necessary capital, they need to be certain they are making the right choice.

Below are five simple questions that every business owner considering franchising needs to ask themselves.

 Is your business easy to replicate?

Given the nature of franchising, businesses that lend themselves well to replication tend to be the most successful. If you are considering franchising your business, you need to first assess how easy it will be to replicate your business. If your business doesn’t have any distinct branding or products to offer, you might struggle to mould franchises in your own image.

On the other hand, some businesses lend themselves very well to franchising. Ideally, a franchising business should be able to spawn multiple franchises without anyone being any the wiser. McDonald’s is a great example of this; every outlet is a franchise, but most people don’t realise this when they first visit.

Do you have the right mindset?

Some people are under the misconception that running a franchise is easier than running a regular business. However, the reality is very different. Franchising is not an easy way of earning a residual income; it will require the same amount of work as running a regular business.

For the businesses that franchise themselves, it’s important to be certain that your business is structured appropriately and that you’re prepared to work with your first franchisees to ensure everything goes smoothly. It’s unlikely you will get everything right the first time; there will inevitably be a few bumps to overcome when establishing your first few franchises.

Because of the inevitable speed bumps in the road, any business owner considering franchising needs to be ready with a plan in place. A franchisor essentially becomes the CEO of two businesses; the franchise business that receives a cut of the franchisees’ income, and the flagship store that kicks the whole thing off. Rising to this challenge requires resilience and determination.

How much will it cost?

As with any business, the costs of establishing a franchise can vary significantly. New franchisors will need to prepare to invest significantly in their new business model. It is a good idea to prepare for a large spend, even if your business is relatively cheap to franchise. Most franchisors find they need to spend a substantial amount to land their first franchisee. But once you have that first franchisee under your belt, the process becomes much easier (and cheaper).

As long as you are willing to invest in your franchising plans, there’s no reason you can’t make a success of them. But if you don’t have the capital to back your plans up, even the best franchises can find themselves running into trouble.

What kind of support can you provide towards franchisees?

The most successful franchisees are those that find the right balance between input from the franchisor and independence for franchisees. Too much independence will mean that each franchise is vastly different from the next, which hurts continuity and dilutes the effectiveness of the underlying brand. Franchisors should be prepared to provide support, guidance, and advice to their franchisees. However, they need to be careful about stepping on their franchisees’ independence and preventing them from running their franchise the way they see fit.

How will you find franchisees?

Marketing is important for any business. But promoting your business as a franchising opportunity is a very different game from promoting your business in general.

Before you begin your search for franchisees and carry out franchise advertising, you first need to define the skills and qualities you are looking for. If you don’t know what you’re looking for, you’re going to have trouble finding it. In general, the qualities you look for in potential franchisees will be similar to those you would look for when looking for a manager for your business.

Once you know what you are looking for in franchisees, the next step is to advertise the opportunity. Where and how you advertise should reflect the kind of people you are trying to attract; look for the channels most likely to be populated by suitable candidates.

Your interview process should be a little different to that you use when recruiting staff. Remember, you’re looking for candidates that can take on responsibility for managing their franchise independently, following your directions when necessary.

If you prepare properly for the challenges ahead, franchising your business can bring enormous returns for relatively little work or risk. But getting a successful franchise off the ground is undeniably a challenge. Before you pull the trigger on your franchising ambitions, make sure you have a concrete plan in place. As long as you know what you are getting into and anticipate your biggest challenges successfully, there’s no reason you can’t make a success out of franchising.