Franchise Consultants: What do they look for in a potential franchise model?
As a franchise consultant, the process of evaluating businesses and working with organizations to identify franchise growth opportunities, I have met with a large number of small to medium sized businesses that enjoyed the idea of developing a franchised system of independently owned marketing offices. Most of the businesses that I have met with and consulted have not qualified as a viable franchise model.
When franchise consultants are making these determinations as to whether you should franchise your business, what are the key factors?
1. Financial Viability of The Business – Your business should be profitable and a potential new franchisee needs to be able to have an ROI on their franchise investment within the first two years. The key to this is to look at the cash out of pocket needed to start the business and not the total investment. The point is that a franchisee needs to see profitability in a short time period. Most buyers will be dependent on the income from the franchise within the first 2-3 years of the business’ opening.
2. Process Oriented Business Model – In order to franchise your business, franchise consultants will want to see structure to your business model. Franchising is all about duplicating success and teaching structure. Successful businesses can be built through grit, hard work and a maniacal business owner. Franchise systems are developed through solid business models and defined operating procedures.
3. A Marketing Model that Works – New franchisees need to know how to build their local marketplace. In order to franchise your business successfully, a business model should have a model that allows new franchisees to build a client base quickly and efficiently.
4. A Value Proposition that Works – Franchise Consultants will always be looking for a strong value proposition from any potential franchise model. What is your competitive advantage? What is your unique point of difference over other similar franchise systems.
Franchising is not meant for everyone, in order to qualify whether to franchise your business, speak with one of our franchise consultants: (800) 610-0292