Does my company have what it takes to be a Franchise System?
(Part 1 in a 9 part series)
Potential clients ask us all the time:
- What does it take to become a franchise system?
- Am I ready to franchise?
- My CPA/attorney doesn’t think I am ready to franchise- AM I?
We believe that an ordinary business, run extraordinarily is very “franchise-able”. Systems need to be in place, as well as process, people and policy to run an effective business, but more so in a franchise.
There are eight keys to Franchisability:
- History and Track Record. Has your business been in operation long enough to project its future success? Is it large enough to provide a level of earnings that would make it an attractive investment?
- Profit. Is it making money? Can it generate a yearly growth pattern?
- Knowledge transfer. Can other people be taught to run your business in the same way that you do, the way that has made it successful?
- Systems in Place. Can all of the daily operations of your business be analyzed and fully described in an operations manual that another individual could follow to produce the same results you achieve? Can every task be replicated?
- Marketing and advertising. Can your business concept be effectively communicated and sold to others? Do you have advertising contracts with national advertisers? Commercials and ads ready?
- Market Scope. Can your business work just as well nationwide? Does it work in different market conditions?
- Be Original. Do you have a unique value proposition? Are you a me too, or a market leader?
- Investment Worthy. A business that is profitable for you might not be profitable for the franchisee. Does enough profit remain, after a franchisee has paid the initial investment in your franchise fee, the costs of getting into business, and an ongoing royalty?
If you are thinking about franchising take assessment of the above attributes. In the next 8 blogs we will define and discuss the attributes and how they pertain to growing your business through franchising.
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