Assessing your business for franchising
The franchise method is used to successfully grow business of all different kinds in a range of sectors.
However this does not mean that franchising works for every business. There are a number of requirements and characteristics that a business must have in order to successfully franchise.
Franchising does not only strengthen the brand, but can also take the business to a whole new level of success. The key thing to remember about franchising is that franchisees are looking to replicate a proven and successful business so that they too can gain success.
Here are the 5 key requirements needed in order to successfully franchise your business:
A business must be proven with a track record of success. This track record may only be 12 months, but if you are able to demonstrate a lot of success over those months then it may work. Usually businesses are proven over a number of years in order to show their customers and potential franchisees that the business has pedigree.
Franchising is not a method to use to save a business in decline. If you cannot demonstrate how the business is making money, you cannot expect a franchisee to make money from the same business model.
The business must have adequate protection. If you are going to licence your company name, brand and intellectual property, you will need to ensure it is correctly trademarked. Without this, someone else could copy your business without franchising through you and damage your brand image. This also protects your future franchisees from competing against a company with the same name which has no connection to them.
You must be able to teach your franchisees what you do and how you do it in a short amount of time. If the business is too complex or requires a specialist skill, then you may look into franchising just a part of your business rather than the whole business model. Initial training will usually last around 5 week’s maximum. After that, the franchisee should be able to work the business as you have taught them, with some support and ongoing training as necessary.
You must ensure there is nothing that will come along to undermine your business. Is there is a technological or fashion change that will knock your business off-course? You need to make sure there is a market and a need for your business and for your franchisees. A franchise agreement is often for at least 5 years so you need to make sure your franchisees will have enough business to be profitable for the entirety of those 5 years.
If you have a business you are looking to franchise, or you would like to find out more information about franchising, please contact our Franchise Consultants by clicking here or calling 02380 275710.
Franchise Intelligence specialises in helping businesses fully maximise the benefits of franchising. Our team is geared to helping businesses apply sound, effective strategies for franchising their business.
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