When should you franchise your business? | BusinessTrade.org

For a set fee, franchising gives a business owner the right to run their business with the added benefit of training and guidance. Here?s how to see if your business can be franchised.

By?Crecencia?Chauma for BusinessTrade.org

Standardisation in products or services.
If your products, processes and services are consistent with the business concept, then you can franchise. For example, the shops of successful franchises are the same. They have the same standards and in most cases, although the location is different, they have the same menus and bargain days.

Distinctive and notable business.
There must be a unique factor to your business that sets it apart from other competitors. You should ensure that your business communicates that so as to ensure success and reception by customers. You must a unique logo or tagline that is memorable to customers. An example is the big M for McDonald?s franchise, and their tag line ?I?m lovin it?.

Straightforward operating methods.
Your business processes should not be complicated. This means that all the business processes must be easy to understand and easy to run. If someone is to receive your business manual, it should not take them a long time trying to understand how it works, rather must be easy for them to develop their skills and start operating.

Profitability.
This is the most crucial factor you must assess. If your business does not generate enough profits to sustain the costs, it is not a viable business to franchise. This is because interested candidates will not buy into your franchise because they will know they will not make enough to cover their initial costs.

Regular Supplies.
If your business seeks raw materials for its running, ensure that there are no fluctuations in supplies. You must enquire from your suppliers if they are able to provide a large quantity of supplies at once to cater for your possible franchise. This will also reflect adequate research on your part as the owner and will ensure that the franchises will operate well without shortages that hinder progress.

Legal constraints.
This is a factor that is usually out of the hands of you the business owner. In an environment that is regulated by government, any policy change may hinder or aid the operation of the franchise. You must be registered and ensure that you meet the requirements of regulatory bodies such as Franchising Boards, Competition boards in your area. Compliance with them will ensure that your business franchise grows well.

Personal commitment.
This is more related to you the business owner. It is your attitude that will ensure that the franchising process succeeds. You must be willing to make a substantial investment in the form of finances, time and effort to develop and support your new subsystem of franchises. Personal and family commitment as well as that of friends and spouses is equally important.

Franchising a business has its benefits, especially to the business owner, allowing them to expand their market quickly and effectively without having to pay for the initial start-up costs; these are usually covered by the franchisee through the initial franchise fee. The other benefit of franchising is that success of the franchise outlet is often heightened because of the personal commitment of the franchisee, who would have invested their own money into it.

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