Can My Business Be Franchised?
Franchising a business can have many different opportunities and challenges, and that is what we will be looking at. What are the key criteria that should be met when one is planning on franchising a business? If you’ve asked yourself this question, then it’ll be answered for you today.
Franchising A Business
There is no doubt that franchising isn’t for every business to take upon themselves. If it was, the market for franchisees would’ve been incredibly saturated. So who does franchising suit? Franchising is ideal for those who would like to take a step back, relax, and let other suitable people replicate the concept of their brand. In exchange for giving the license to use the brand name, a certain part of the revenue is given to the franchisor. If you’re someone who many struggle with giving a certain degree of brand image control to someone else, then it could prove to be a challenge.
Expansion Of Your Business
One incredible opportunity that comes alongside franchising is the opportunity to use it to expand your business. Unlike all the other ways, the growth rate through franchising is more rapid. The best part is that your business expands without you having to invest and develop a lot of capital. Your local presence can reach where you wouldn’t have thought of, where your business could be known all over the country, which is something that would be difficult to achieve through the recruitment of managers and staff.
We aspire to truly help businesses in understanding the art franchising, which is why the initial meeting that we have is completely free of charge. It is important to understand what the potential of a business is in terms of franchising, which is why a franchise business plan must be created. It includes the approach that the business is taking towards the market.
Let’s plan a meeting if your business can meet all of the essential factors that we are looking for.
Since more and more businesses are looking into franchising, to succeed, it is important to set yourself apart. What is the distinctive quality that your business has? Do you offer any such product or service that may be distinct and unique? We don’t just look for distinct products or services, you can have a unique way of controlling and reducing costs or even a distinct marketing strategy. If you’re good at conducting your business, others will be sure to generate their interest in you.
Your business needs to be credible when it comes to franchisees. No franchisee will invest in purchasing a license for a franchise that isn’t credible. Many aspects indicate a company’s credibility. These aspects include the success of the company, whether or not the company has a good and reliable management team. A good management team will always enhance the potential of a company and makes it much more credible.
3. Trends And Conditions Of The Market
This is an essential factor to consider. The market that you are trying to enter, using your franchisees, should be one that is growing, or at least stable.
4. Have Your Pilot Operations Been Successful
One cannot sell a license to a franchise that is just an idea. Your businesses activities should be generating revenue. What this means is that the pilot operations of your company should be making money.
5. Knowledge Should Be Transferable
When you acquire franchisees, your business model and business knowledge must be such that they can be transferred on to the franchisee, that too, within a reasonable time. If your business is related to the medical field, where an accurate transfer of knowledge could take several years, then it is highly unlikely for you to have many potential franchisees.
6. Documentation Of Systems
Another thing to consider is whether your business has certain processes that have been documented and whether or not third parties can use them. Your system should be such that it can be documented into what is known as a Franchise Operations Manual. This manual is essentially the blueprint of your business that will help the franchisee to replicate it. There is no issue if you don’t have a Franchise Operations Manual, we can easily develop that for you.
7. Affordability And Return On Investment
One cannot acquire many franchisees if the cost is way out of reach. For a franchise to become successful, it must be affordable to all of the potential franchisees. It is also important that after the fees have been paid, the franchise should obtain an adequate amount of profit. If the franchisee obtains a profit, only then will they earn a return on their investment. If not, all of their invested time and money will go to waste. By the 3rd year of trade, the franchisee must observe a return on investment that is significant.
One of the most important aspects of franchising is that a bond of commitment should be made between the franchisor and the franchisee. This bond should also be rewarding for both parties. This bond has been seen in all those franchisors that have been incredibly successful. This relation between the two plays a great role in how profitable the franchise is, and in several other aspects, such as improvements in the system.
9. Management Strength
The most prevalent factor that contributes towards the failure of a franchise is the lack of management, which essentially weak management. This can be in the form of understaffing or that the management is inexperienced. It is important for franchisors to not overburden themselves by taking on every role.
While you won’t have to invest a lot of capital when you choose to expand your business through franchising, there is still a certain amount of capital required. To implement the Franchise Development Programme and to carry out recruitments, the business needs to have the required capital.
After familiarising yourself with the 10 essentials of franchising, if you think that you can meet and easily consider a majority of them, then what are you waiting for? Contact us and we will help you in starting your franchising journey with good business strategies and a long-term relationship.