WHETHER OR NOT TO FRANCHISE ISN’T AN EASY DECISION. YOU’LL NEED TO CONSIDER THE BUSINESS ISSUES AND WEIGH THE PROS AND CONS FROM AN INFORMED PERSPECTIVE
Taking into account the various factors that contribute to the success of a franchise program, we have identified eight keys to franchisability, against which you can measure your business:
- Size and longevity: Has your business been in operation long enough to project its future success? Is it large enough to provide a level of earnings that would make it an attractive investment?
- Profitability: Is it making money? Consistently? Predictably?
- Teachability: Can other people be taught to run your business in the same way that you do, the way that has made it successful?
- Systematization: Do you have a monitoring mechanism or tools to track operations easily and remotely?
- Marketability: Can your business concept be effectively communicated and sold to others?
- Transferability: Can your business work just as well in another part of the country or in different market situations?
- Originality: Do you have a point of difference from your competitors? If you’re just saying, “Buy my product because I’d rather get rich than have them get rich,” you are not going to be successful—in business or in franchise. Will something distinctive about your business result, in consumers buying your product or service? A “hot and juicy” hamburger, for instance, or a winning marketing concept.
- Affordability: A business that is profitable for you might not be profitable for the franchisee. Does enough profit remain, after a franchisee has paid the initial investment in your franchise fee, the costs of getting into business, and an ongoing royalty? Will they need significant financing? Can you help them obtain it?
