Should I Franchise My Business?
To franchise your business successfully, you need vision, ambition and the commitment to grow your brand before anything else. Regardless of how great your business model is, you need to want what franchising can do for your business. We’ve seen great businesses start the franchise process and fail to achieve results not for any other reason than they just didn’t commit to the franchise expansion process and the growth model faded where on the other hand lesser versions of businesses in the same industry had incredible franchise growth because they were focused on scale.
I remember distinctly having worked with several restoration service franchises where one brand had a big business doing $15mil a year and another was generating $750k per year, both in the same market, same industry and essentially the same business model. The big brand launched their franchise and after the first unit was sold stated to me, we are going to keep working out corporate business, we just make too much money to focus on the small profits that one franchisee pays us. The small brand committed to the franchise platform and continued to reinvest, drive growth and grow. Ten years later, the small brand was now international, with 450 units globally and the founder sold the brand for just over $200 million. It was a defining moment for me to realize that lot of what makes the franchise development model work is the commitment and focus of the leader.
If new market growth and expanding your brand is a top priority, the franchise model should absolutely be on your list of ways to grow your business. That still doesn’t necessarily mean every business owner should franchise, so here are some of the elements that should be considered as to whether you should franchise your business.
- Do you have a brand in place? Good solid website, logo, social media, consumer marketing?
- Do you have a unique selling proposition that makes you stand out against your competition?
- If you aren’t already working ON instead of IN your business, are you prepared to start taking the necessary steps to do this?
- Do you have some resources to invest in franchising your business?
- Do you have a system in place that could be taught to new franchise owners?
- Do you have a product or service that is in demand and growing in demand?
This is a good starting point, next we need to look at the numbers and make sure that there is a compelling financial presentation in place. What are your current location financials, profitability and costs of doing business? How does this compare to the investment necessary to open a location of your business? If you’d like, get some help going through these questions and help deciding if you should franchise your business model. Contact us for a franchise feasibility discussion, no obligations;
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