Franchising your business, expanding your formula
Now that we’re a few days into the new year, people begin to seriously buckle down on the resolutions they set out for themselves (unless you’ve decided to give up already). For a small business owner whose company is running smoothly and meeting revenue expectations, one of those resolutions might be to franchise the company.
If you’ve found a formula that appears to work, it makes sense to wonder if it can be replicated in order to extend the success of your business. But there are some things that should be considered before moving forward with this decision if you want the experience to be positive and profitable.
Do you have the resources to expand?
This question is hugely important. Before you go forth and multiply, will you be able to reach the increased product demand needed to fill new incoming orders or requests for service? Is there a large market in the areas you want to open franchises in?
You want to make sure that your business can rise to the challenge of increased demands as poor performance drives consumers into the arms of your competitors. And before you begin making money, there will be legal fees and other start-up costs in order to get these additional locations going.
Does your business have a positive trajectory for growth?
In order to remain competitive, your business must be flexible enough to adapt to market changes, trends and expectations. This disruptive nature in the market shakes things up and weeds out weak contenders. If your business plan possesses a strategy of continuous innovation year over year, your company could benefit from opening franchises and helping lead market change as your increased presence helps your brand gain even more visibility.
However, if you franchise into multiple locations with a stagnant plan, you’ve increased your problems tenfold.
Who is your model franchisee?
A franchise is an extension of your business so you should take care to choose individuals who positively reflect the values and work ethic that you want to promote. While these franchisees do report to you, there’s a lot that can go awry while you’re manning headquarters, so choose wisely.
Are you a good instructor?
The people who will be operating the franchises are initially taking their cues from you regarding products, marketing and overall operations. Do you have all of your business processes fully documented and have the capability to instruct how to run your business?
You want your franchise to reflect positively on you, and therefore need to be able to impart these specifications and practices to interested franchisees to ensure the new locations meet your standards.