Is Now the Time to Consider Becoming a Franchisor?
Are you interested in expanding your business? If you want to take your business to greater heights, you should consider starting a franchise. A franchisor reserves the right to a brand name or trademark and can sell it to a franchisee or anyone he deems fit. However, there is no particular statistic or circumstance that knocks you on the head and tells you the perfect time to get started.
Your decision depends on a host of factors. You can get off to a good start if you can ask and answer some crucial questions. Some of these questions include: Do you have a fiery desire to build a large business? Does your business enjoy a consistent cash flow? Do you have the capital to develop the franchise system properly? These are vital questions that you should ask yourself. They determine if you are ready to take the step of affirmative action.
Franchising is a highly adaptable format and almost any type of business can own a franchise. However, there are some basic criteria that need to be met before you venture out. Is the business credible? Does your company have experienced people in positions of power or did you jump lump together some inactive relatives and your beer buddies together? Do you enjoy coverage in the local press or are you only popular with the people who live on your street?
In addition, consider if your business can be differentiated from the competition. Can it also be marketed as an attractive business opportunity? Do you have operating systems in place? Are these systems easily documented for others to follow? Can anyone interested in your franchise learn the rudiments of your business in 3 months or even less?
What about your profits? If a business cannot generate a 15%-20% return after extracting royalties, it would be hard to keep franchisees interested. If your business meets all these requirements now might just be the time for you to consider becoming a franchisor.
In conclusion, before you decide to become a franchisor, a concrete and expansive plan must have been developed. The plan must suggest support services, personnel, fee structures and territorial development. The plan must also take into account the potential issues that might impede the success of your franchise.
Your full plan would need to be tried and tested to ensure that your strategy is perfect when you eventually get things kicking. It is important for you to know that franchising is a different ball game altogether. You are meant to perform dual roles, which includes selling franchises and servicing them.