Is My Business Franchisable?
In this latest blog post from the franchise team, Natalia Shvarts, discusses the key considerations when thinking of franchising your business.
To determine whether or not your business is franchisable, you need to consider the following factors:
- Success – is your business profitable? At the end of the day, going into business is about making money and you are unlikely to recruit many franchisees unless they can make a return on their investment.
- Longevity – is your business fulfilling a temporary demand in the market or is this something that will always be required? There is no point investing money and effort into getting your business ready if the demand for your goods or services is likely to be short-lived.
- Scalable – does the success of your business depend on you and your special skills or abilities? Franchising is all about being able to replicate and train others to do what you do. If this requires very specialist or technical knowledge or extensive training and qualifications, then franchising may not be the right vehicle for you.
- Unique – what makes your business different from other similar businesses? Being unique does not necessarily mean doing something that nobody else is doing but it might be doing things in a different way, having a unique selling point or a strong brand that is capable of attracting franchisees and customers (and that can be protected).
The best way to test whether your business is franchisable is to pilot it, this means getting someone else to operate your business by following instructions. To do this, you will first need to create a manual – a step by step guide on running your business. Having a good manual is essential and it is therefore important to ensure that you get this right. Having said that the manual will always be a “living” document, meaning it should and ought to be updated from time to time. You will then need to find the right person to be your test case. The right person is essentially anyone who is not familiar with your business and better still, not familiar with your industry. For example, using an employee for the pilot is perhaps not the best choice as they will already be familiar with your business, processes and how to run the business.
Establishing if your business is franchisable is only the very first step and does not necessarily mean that you should franchise. Franchising requires commitment, investment, and ability to look at your business through a critical lens. You might find it helpful to speak to other franchisors – both established and new ones, attend an exhibition or two, take part in workshops aimed at “franchisors to be”.
Franchising is not quick, and it is not necessarily cheap. Successful franchisors are ones who never stop investing, developing and improving their system and whilst that is not easy, it can certainly be very rewarding indeed!
Our dedicated franchise team has created a thorough checklist for a new franchisors, outlining the key steps that that should be taken in order to run a successful franchise. For the checklist, please email firstname.lastname@example.org
By Natalia Shvarts