There comes a time in many entrepreneurs’ lives when they consider franchising their business. But how do you know if your business is franchisable and when the right time is to make this big leap? If you were to ask a business franchise consultant, they would offer you similar advice to what we have prepared below. Curious? Let’s take a look.
- What is the advantage of making your company franchisable?
- How to make your business franchisable
- Infographic
- Final thoughts
What is the advantage of making your company franchisable?
Franchisable businesses offer their owners many advantages. For starters, you’ll be able to expand your business into new territories and markets, going the international route if you choose. In addition to this, you’ll be able to enjoy varied and diversified revenue streams both from selling franchise units as well as the ongoing royalty payments that each franchisee will be paying you. Your brand will grow stronger, it will see more visibility and recognition in the market. And on top of this, there is the opportunity to work with like-minded individuals who want to see your business grow, succeed and thrive.
How to make your business franchisable
All of the above sounds pretty attractive, right? But is your business ready to be franchised and are you prepared for what’s to come? Some factors for consideration when considering how to make your business franchisable include the following:
Leadership team
One of the first questions a franchise business consultant would ask you would be what is the current composition and structure of your leadership team and whether it is in a position to handle rapid growth.
Because franchising relationships usually last for a number of years, this team needs to be in it for the long-haul. In fact, you may even need to recruit and train new staff to take on the added responsibilities of managing, training and supporting franchisees.
You also need to ask yourself whether you are capable of teaching your business model to potential franchisee prospects. Is it, in fact, teachable?
Uniqueness of the product or service
Franchise consultants would also look at the X-factor of your business. Whether you’re selling products or services is not important.
What is important is the fact that these are unique, serve a market need, there is consistent and growing demand for them, and you are able to deliver quality products or services on a consistent basis.
Ability to replicate the business model
Many business owners believe their business is suitable for franchising when it isn’t. One of the main reasons for this is the technical or complex nature of their business model.
As mentioned above, the business model must be teachable. It also needs to be able to be replicated quite easily and quickly. This means that training your potential franchisees should not take you more than a couple of days to around three months.
Anything above this means that your franchisee prospect is likely to lose interest, they may feel as though they will not gain fast returns on their investment and they may simply start becoming frustrated at their inability to earn from the get-go. For you as a business owner, this also means longer delays in terms of financial benefits.
Profitability and costs
By approaching franchise consultant services, you will also be able to closely explore the financial side of the franchise business operation.
For example, you’ll be able to work out your projected profitability levels and juxtapose these against your costs. But perhaps more importantly, you need to figure out if your current levels of profitability are consistently high so that your franchisees can expect similar returns on their investment, too.
Remember that prospects are after a profitable brand that will also empower them to earn high yields. The more attractive your business is from a financial standpoint, the more quality prospects you’re likely to attract to your franchise.
The business has stood the test of time
Making your business franchisable also entails looking at its historical performance. How well have you done in the past and what strategies have you used to achieve this success?
In addition, you may have also successfully replicated your business in other locations and you are now looking for further expansion.
The services of an international franchise consultant will come in quite handy as you’ll need to be prepared to train and thoroughly equip your master franchisees with the right tools so that they can penetrate new markets successfully.
Ability to train, manage and support the network
Making your business franchisable will require that you have the patience, know-how and willingness to train, manage and support your entire franchisee network.
Remember that one of the reasons why your franchisees have chosen the franchising spectrum of business is because they won’t be operating on their own or starting from scratch.
The ability to offer them all the guidance and support that they need to make a success of their enterprise will depend on your willingness and capacity to accommodate these needs.
Preparing all the legalities
You will also need to consider the legal aspects of turning your current business into a franchise. These may include the preparation of the final Franchise Agreement that is signed between the franchisor and franchisee when a deal has been sealed.
And there is also the Franchise Disclosure Document, which is presented to franchisee prospects when they first express an interest in your business.
Apart from these documents, you will also need legal advice in order to turn your current business into a franchise. This will mean undertaking all the necessary registrations with the right legal bodies and institutions to ensure you’re absolutely covered from every angle.
Protected intellectual property
The final point we’d like to raise here is that you need to ensure that all intellectual property that you’ve built up and acquired over the years is thoroughly protected.
This includes aspects such as your business’ reputation, the brand, logos, systems, technology and proprietary software, etc.
Making sure that you take these steps will ensure that further down the road, your brand identity will not be diluted as you’ll speak about your brand in one consistent voice which your customers will know and recognise you for.
Final thoughts
If you’ve always wondered “what does a franchise consultant do”, the short answer is many things.
The long answer, on the other hand, entails advising business owners as to all the requirements for turning their business into a franchise and managing the projected growth that comes with this type of endeavour.
If you’re ready to speak to someone about franchising your business, we’re right here to help!
Just leave your details with us and we’ll get back to you as quickly as possible. We’ll cover any questions or concerns you may have and offer you useful advice about the steps going forward. Don’t hesitate! Get in touch with us today.
