As a business owner, one of the key factors in your future success and growth is how you expand. This can often be an expensive undertaking – you need new premises to open somewhere else, you have to employ staff and work on your marketing and that’s just the start.
One of the most popular ways to expand a business today is to open a franchise. This is where you open up your company as a business opportunity for people who are willing to invest their own money. They follow your tried and tested operation and essentially replicate it, acting as the business owner themselves while still being a part of your enterprise.
You may be surprised to learn that many large corporations, including MacDonald’s, use franchises to increase their business.
There are several things to consider, however, before you go down this well-travelled road. Getting it right or wrong at the outset can mean the difference between success and failure.
- Is Your Business Successful?
There’s no point in trying to expand a business that is struggling. Most entrepreneurs don’t consider moving into franchising until they are 100% sure that their existing enterprise is successful. That means you also need to have all the branding and systems in place for your business and be achieving a strong return.
- Can You Scale Up?
The key to franchising is that it replicates your business in different locations. That means your product or service needs to have a market and you need to be certain that you can teach your franchisees how to deliver your business model. You’ll want to maintain quality and consistency across each outlet and you’ll need to be able to attract the right types of investors.
- Can You Protect Your Brand?
Your business will have several primary assets, the most important being your brand. You need to have legal protection in place (including trademarking) to keep this safe and ensure that third parties don’t take control.
- Are You Committed?
Probably one of the biggest challenges you are going to face is the time and effort that needs to go into setting up and maintaining the franchise. It’s not a simple question of creating the documentation and signing up interested people.
You need to have a team in place to implement everything. For example, how are you going to select your partners? How are you going to train them? How will you ensure that they are following the rules of your franchise and not doing their own thing?
You should be investing time and effort in building your franchise and that includes having a 5-year plan. You’ll also need capital – while franchising is a more cost-effective way to expand your business, it takes money to set up and there are no real short-cuts. It’s important to look at all the costs involved and make sure that you have the budget available to realise your dream.
Contact The Franchise Specialist
Should you franchise your business? It’s important to sit down with the experts if you are considering upping your operation and offering opportunities to franchisees.
At the Franchise Specialist, we not only help you decide if this is the right move for you but explore what your next steps should be.