Once a business venture is very successful, the very question to ask might be this: “Is my business ready for franchising?” Every businessman wants to have the success or popularity of a prestigious company like, say, McDonald’s. But how can one know if he or she is ready to become The Next Big Thing in the business world?
Lots of businessmen want to become franchisors to widen their business scope and popularity. Earning big will come easy once the franchisees come in. But before one takes the plunge to become a franchisor, let us take a look at 5 signs that will indicate your readiness for franchising.
Of course, before you can endorse your business to others, the business should be doing well in terms of profit. Franchise-ability directly relates to how much your business has been consistently profitable over a period of time. As a general rule, a period of 3 years in the business will suffice, and that those 3 years should have resulted to a steady record of profits. Having more than one business location will most certainly help to prove that the success is not only popular in one sector or region.
2) Possesses a New Niche
If the business presents a truly unique experience, then it may be in the business’ best interest to franchise it quickly to gain first recognition as the founder of that new industry or niche. Location also comes into play, as the niche should be made available only to a certain geographic area to avoid competition from other brands having the same niche as you. Territorial exclusivity should also be considered to ensure that the franchise will face minimal competition within that specific geographical area.
3) Business System
Making sure that the business to be franchised will be teachable to franchisees is very vital. The business should be easy to replicate in other locations. A sort of Operations Manual should also be created for the potential franchisees to see and use. Franchisee training program should be made available prior to franchise offers. To sum it all up, before franchising, you need to carefully and meticulously document both how to develop and operate the business you want to franchise, and plan very well on how you will train others to replicate your business processes. Preparing and presenting a very good plan to franchisees is essential; it is what will determine whether or not they will support you or not. Trust me when I say that no one would want to join a business without a educated plan.
4) Business Name or Logo
Another important aspect is the creation of a legal business name and logo that can obtain and maintain trademark protection. Having a legal and strong symbol or mark for both marketing and legal purposes will be extremely vital for the business to stay afloat and to ensure long term success. All franchise businesses have a legal business name and logo, and for those who don’t have any should consider branding and obtaining trademark prior to their franchise attempts. Failing to do so will have legal repercussions.
5) Franchisee Capital
This is rather standard. Franchisees should be able to have the financial resources to have the capital needed to get the franchise. Capital not only involves establishing the business brand; it also covers the capacity needed to open and operate the franchise. A potential franchisor needs to investigate franchisee profiles for the franchisor to have a good idea of the net worth (both total and liquid) of the franchisee to know whether he or she is qualified to take on the franchise.
If these 5 signs reflect positively, then it might be a good time to franchise your business. Consistent evaluation, careful planning, and endless research will be the key. Once all concerns have been dealt with, market your franchise and become the next big thing!