Before Jumping Into Franchising, Ask Yourself These Important Questions
Your concept outlasted pandemic-mandates and municipal shutdowns, you pivoted and accumulated a lifetime worth of lessons on how to do more with less to keep your doors open. So now that the pandemic’s intermission is coming to an end, what’s your second act? Should you franchise your business?
If you’re like most entrepreneurs, the answer is growth.
This may seem counterintuitive after all the uncertainty of the past two-plus years. The smart move may seem to be to stay put and watch. Right now, however, opportunities are plentiful, both in the guise of available locations and potential business owners who have decided to seize the day instead of staying at their previous day job.
Franchising has always been a popular growth vehicle for independent operators, especially those who want to create opportunities for family members or reward loyal employees who weathered the pandemic alongside them. And while franchising’s list of benefits includes more readily available capital, faster growth and motivated “managers,” there are other considerations before you enlist an expert to help you set up your franchise offering and create the necessary legal and operational documents.
Are You Ready to Franchise Your Business?
Is now the time to franchise your business? First, take a close look at your concept itself:
- Is it unique or memorable?
- Does it have a “value-proposition” that will make it both marketable and replicable?
- Does it fill a niche or solve a need for a particular product or service? And is it one that warrants regular return visits?
- Are there well-documented systems and procedures that are easy to follow?
- Is there a solid management team with a proven track record in place?
- Is it profitable and will a franchisee be able to make money after paying franchise and marketing fees to you?
Before you jump, spend some time answering the above questions honestly. Do your due diligence, the same research you’ll be asking your potential franchisees to do on you.
Know Your Competition
How does your business stack up? For instance, if you’re a fast-casual restaurateur, visit franchised fast-casual eateries to see how yours compares. What can you offer potential investors that they aren’t?
Know Yourself
Do you really want to be a franchisor? As a one- or two-unit doggy daycare provider, the highlight of your day may be interacting with all those enthusiastic dogs. But once you shift your attention to building a franchise, the companions you’ll be spending time with won’t be canine. Will the business be as enjoyable when you’re removed from the day-to-day activities that were your passion when you started out?
Know What You’re Getting Into
Are you ready for a serious commitment? Know what you’re getting into. While franchising offers a quicker way to open multiple units than self-funding your growth, it involves research and lots of questions – some of yourself and some of experts.
Being a franchisor is a long-term commitment. It may seem trite, but think of it as a marriage between you and all your franchisees. And since no one wants to deal with divorce before saying their vows, think long and hard about should you grow or should you stay.