Franchise Your Business: How to Sell a Franchise
Franchising is a big step for most companies. Preparing the paperwork, putting together the operational structure, developing a business model that can be replicated, and defining the structure that will support and nurture franchise growth can take a great deal of time, money, and effort to build.
When you have decided to franchise your business and all of the right pieces are in place, it is then time to actually sell a franchise. Having spent the past ten years in the franchise industry, it is remarkable to me how many businesses go through the franchise development process and then don’t have the understanding or proper system in place to actually sell a franchise. So when you franchise your business, how do you actually sell a franchise?
Franchise sales is a different game from traditional sales, but not entirely. Many franchise consultants position franchise sales as this mythological creature that no salesperson has come across before, the bottom line is that it is still sales so there are many similarities. What most people don’t understand is how much leg work there is to get a potential franchise buyer over the line to invest in a new business and commit to your franchise. I can tell you, it’s a lot of work.
Particularly as a new franchise company, no one will understand or believe that you have a qualified and validated franchise model, so you can double the already substantial work until you sell ten of them. The first number of franchises will be the most difficult when you first franchise your business.
It will take great salesmanship, many phone calls, persistence, discounts, and anything else you can think of to get the first people into your franchise system. The problem I have seen as have many franchise consultants, is that new franchisors have a tendency to feel that the franchisee should be thanking them for the opportunity, not the other way around.
In reality, until you have 10 units operating in your franchise system, you have zero validation of your franchise model. It takes blood sweat and tears to get there, but when you do, franchising can produce 60-70 percent profit margins for the franchisor. It can be a wonderful business, but when considering whether to franchise your business, don’t go into it without a solid plan and a good understanding of what the business entails.
For more information on how to franchise your business, contact us.
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