If you are an entrepreneur, then you might have dreamt of expanding your business by entering the world of franchising. However, just like starting a business, franchising is also a long and complex process that requires in-depth market research, strategic planning, and commitment.
If you don’t know where to start or if you’re afraid to commit mistakes, acquiring the services of a business brokerage firm helps you make important business decisions. Experienced business brokers are equipped with industry expertise and strategies that guide you in scaling up your business.
In order for a franchising business to succeed, you need to evaluate whether your existing business is ready to expand.
Here are questions you need to ask yourself before you start franchising your business.
Do You Have the Capital?
One of the most important and obvious determinants of a successful business is if it is making a profit. Launching a franchise requires capital and part of your capital will be sourced from the earnings you make from your existing business. Your franchising budget should be able to cover legal, marketing, and infrastructure costs among many other expenses.
Is Your Business Scalable?
The effectiveness of your branding strategy, the efficiency of your internal systems and processes, and the know-how of your team are also critical in determining business franchising success. These factors are important because you need to replicate them for your future franchisees. Scalability means your future franchisees will be able to deliver the same quality of products and services following your business model.
Is Your Brand Competitive?
When you become a franchisor, you will be competing with other franchisors and franchise systems. Your business must be able to attract customers in various locations, whether it is local, national or international. A brokerage firm will be able to help you in assessing your brand’s strengths and weaknesses, selling points and development goals. These will be used as reference points in building a unique franchise system for your business.
Do You Have a Legally-Protected Trademark?
A trademark represents your brand and makes your company easily identifiable. As a franchisor, you will be sharing your business name, logo or slogans with your franchisees. Ensuring that your trademark is registered legally gives you the right to assign the use of your trademark to your future franchisees. At the same time, it will serve as protection from other business owners, especially your competitors, in using your trademark.
Will You Be Able to Devote Time?
Starting a business franchise begins with creating a franchise system that will be uniformly followed by all your franchisees. Apart from ensuring that your franchisees follow the system, you also need to devote time to training your franchisees on your products, services, and policies.
These will require you to spend time on-site guiding your franchisee in managing the daily store operations up until the time that they will be able to do it independently. You also need to devote time in continuously learning about market trends and looking for ways to improve your products and services for you to retain a competitive position in the industry.
The success of your franchising business depends on your answers to the above questions. Always remember that businesses involve many risks, but the risks can be manageable if you are able to do your research and plan ahead.