What Makes My Business Franchisable?

Winning Concept - It doesn’t mean that it has to be the idea of the century nor is it absolutely necessary for it to be a one-of-a-kind. Some of the most successful franchises operate on a very simplistic approach. What it does have to be is one that is interesting and enticing as perceived by a prospective buyer.

Effective System of Operation - The way you run the complete business is the key. Franchisees must be able to duplicate your operating system with ease and adaptability.

Teachable Operation - The day-to-day operations must be teachable to prospective buyers (provided they have the necessary background and key profile) within a reasonable period of time. (Typically 2-4 wks). This is an essential element in the basic foundation of a franchise.

Profitable - The franchisee should be able to earn a decent salary – comparable to that which they would earn if they were the manager plus a 15% return of their invested capital (this doesn’t usually occur until after they have been up and running for two years). They should be able to realistically recover their investment within a reasonable period of time from the direct earnings of the business.

Nationally Adaptable - There should be a market for your business not just locally, but nationally as well. This is a true test as to whether your franchise can be marketed nationally and internationally to prospective buyers.

Possess Management Skills - You will now be running a franchised company, not a restaurant, retail establishment, or service business you now operate. It is critical that the management of the company has the ability to grow with the franchise program.

Financially Stable - In order to attract the initial franchisees to your business, you must posses a reasonably profitable business operation as well as afford the initial expenses involved in franchising and the marketing of such.

Unique aspect – Is there something different in the way you operate or what your business offers that contributes to your success? This element can become a key sales tool when presenting what your franchise has to offer over the competitor.

Financible - The more that the franchisee can get financed, the easier to sell franchises. Buildings, equipment, furnishings, fixtures, inventory and receivables all can be financed and make it easier to create leverage. Some franchisees offer in-house financing for a portion of the initial investment. The majority of others continue to offer their franchisees assistance in obtaining 3rd party financing via SBA, banks, lending institutions)

Marketing – No business, no matter how great a concept, can be successful if the customers either do not know about you or do not know where to find you! As a franchised business operation, advertising and promotional programs will need to be put in place on the local as well as the national level to assist your franchisees in gaining their fair share of the market. These programs are funded by the franchisees and implemented by the franchisors. This concentrated effort by all parties benefits everyone with widespread name recognition and increased consumer awareness thereby increasing the maximum opportunity for success.

The Right Help at the Right Price! - There are many franchise development companies that will be more than happy to assist you in this endeavor and do so in a professional and competent manner. However, the drawback to this approach simply comes in when the price of the "sizzle" they’re selling far outweighs the value of their services. Due to the numerous requests we have received from our clients, asking for our assistance in this area, we have chosen to investigate the components involved in franchising one’s business and the related costs of such. What we have discovered is a wide margin that exists between the true costs of franchising ones business and the actual costs that are being shouldered by independent business owners through means of franchise development companies and legal entities alike. If you find yourself in this position and would like to learn more about your alternate choices, you can advance to our client registration form for your free no-obligation consultation.

Planning Stages - We can help you decide on the best pattern of growth for your business. Knowing the right type of franchise you want to offer and the right region for growth is very important. Doing the planning up front enables you to make sure you are able to control your standards throughout your chain. By determining territory size, revenue streams, internal staffing needs, etc., you will be better prepared for handling the challenges of expansion. For example, a California-based business would have a difficult time supporting a single unit located in Maine, even if there is an interested franchise buyer there; with good strategy, you can prevent costly mistakes and make sure you have adequate resources to keep an eye on quality. Poorly planned franchises have trouble maintaining consistency.

Legal - In order to properly enforce your company’s standards, having a strong Uniform Franchise Offering Circular (UFOC) and Franchise Agreement in place is critical. The legal documents define the relationship between you and the franchisee for several years. If someone is not following your guidelines, good legal documents will allow you to enforce compliance or remove them from your system.

Operations - Having a complete operations manual is crucial. This means not only the daily operating procedures, but also includes everything a franchisee would need to know to operate effectively. In order for you to enforce your standards, you need to define them for your franchisees. By having a manual that intelligently shows your franchisees how to properly run the business, you increase the level of quality they will produce. Without showing your franchisees the right way to do things, they may improvise which can sacrifice quality.

Training - You can often tell a successful franchise by the quality and quantity of their training. By creating a training program that is vigorous, you will be able to weed out bad franchisees before they open their own locations. Ongoing training and assistance keep existing franchisees happy and the quality of their work high.

Franchise Sales - Success in maintaining quality in a franchise program starts with the sales process. That’s where the services of FranConsultant prove invaluable. We work closely together with you and your key officers to understand your companies operation and its values so we can best represent your franchise offering to qualified prospects. Through our informative and systematic process we will be able to determine if the candidate can successfully perform as a franchisee in your structured operation and if they are the right ‘fit’ for your company’s culture and values?

Just as maintaining quality in your current business requires a commitment, so will maintaining quality in a franchise. It is important that you build your expansion program with the right foundation and use quality ingredients. It is not enough to simply value quality; you also need to be able to ensure quality. Having the commitment, the planning, and proper tools, you can build a company with dedicated owner operators who will share your passion for excellence.

Links:

What Is Franchising?
Who Should Franchise?
Benefits Of Franchising
Franchising Facts
Franchise Q & A's
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