Franchising your business offers you some intriguing benefits:
- Attracting franchisees to invest their capital into your brand.
- Franchisees are manpower to work the business as stakeholders.
- Increased number of franchises contribute to the establishment of the brand.
- Gain royalty income without capital investment or an increase in contingent lialbility.
- Retain control of the trademark and the business format.
Before you consider franchising your business:
- Make sure the first units economics are strong and profitable.
- Then open a second unit to see if you can replicate the success of the first.
- If the second unit succeeds, try opening a unit at least an hour away. This will show you if your processes work without your being around all of the time.
If your experiment succeeds, you will be in a good position to consider franchising your business.
Cross Posted at: Let’s Talk Franchising
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With over 25 years of franchise, marketing, and entrepreneurial experience, and the owner of Franchise Perfection, Jim Coen, brings key skills to franchise consulting for those interested in buying a franchise business opportunity.
Jim has been a franchisee, worked for franchisors, ran a multi unit operation for a franchisee, and served as a franchise consultant matching candidates with the right franchise.
At Franchise Perfection there is no perfect franchise, but there is always a perfect match.
For over 20 years Jim worked with Super Coups. Super Coups is a MA based direct mail franchise business to business opportunity.
Prior to Super Coups Jim successfully marketed franchises in the New England area for Uniglobe Travel Northeast a travel franchise, Merry Maids a maid cleaning franchise, & Emack & Bolio an Ice Cream franchise.
Jim was the host of a popular radio show in the Boston Area called "Let's Talk Franchising" that was broadcast on AM 1060 WBIX The Boston Business Station.
Jim currently serves on the Board of Directors of the New England Franchise Association (NEFA) www.nefranchise.org
It was written:
Before you consider franchising your business:
* Make sure the first units economics are strong and profitable.
* Then open a second unit to see if you can replicate the success of the first.
* If the second unit succeeds, try opening a unit at least an hour away. This will show you if your processes work without your being around all of the time.
My reply:
First the kudos: Good general advice.
In the same venue:
Am I the only one who wants a zor (of a store front operation) to be active in the same business as the zee? I like McDonalds(not a recommendation) because they operate stores, and have test stores for testing new products and techniques. It seems to me “franchising” should ideally be a way to leverage your “system” by using OPM in the form of a franchisee but the franchisor should be firmly committed to the system and operate a number of stores throughout the geographic regions they franchise in. In other words if it is a store front operation I am not even slightly interested until you have shown success growing your system on your own dime and showing profits in a number of units. I think this is part of the problem with franchising, far to many 1-5 unit wonders.
For example, take a look at Potbelly(this is not an endorsement). They do not franchise as of yet, but are slowly moving toward it. They have demonstrated the ability to expand and profit in a number of markets, one unit at a time, competing in a market saturated with “me toos” and overcoming the competition. To my way of thinking, I would rather franchise with a “zor” who is actively in the business and derives strong profits as an operator than with a “zor” who simply profits on royalties of a “zor” who may or may not be profitable.
Regards,
FuwaFuwUsagi