To franchise or not to franchise..that is the question
To decide whether or not you should franchise is a common question that most successful businesses face. First, you must ask these two very simple questions: why franchise and is my business franchisable?
Why franchise?
To expand your business to another location it usually takes significant amount of cash, which is typically a barrier for most business owners. Since franchisees provide the initial investment, it allows you to expand with minimal capital. Keep in mind that you will need some capital to develop and manage your franchise model but it is significantly less than funding a complete second location.
Another barrier business owners face is finding good operators. Since the franchisee will have both an investment in the business and a stake in its profits there is a good chance that performance will be high.
Is your business franchisable?
To be a successful franchise your business must have longevity. If your product is a fad or has a chance of the demand decreasing dramatically it is not a good candidate for a franchise. Your product must have sustainability over a long period of time.
The business also needs to be replicable and teachable. Do you have standard operating procedures that are documented and easily repeatable? Could someone learn to operate your business in three months or less? If so, your business could be a good candidate for a franchise.
Franchisee? Franchisor? Either way, the Sofranko Advisory Group has both the hands-on experienced history of the business, and the expertise of today’s market place. For more information contact us at info@sofrankoadvisors.com or 724-935-7151.
