This is a list of some considerations in determining if your business can be franchised:
A rule of thumb is that the business should be operating for at least 3 years before it is franchised.Whilst this is not set in stone, it does allow for the business owner to:
(a) determine if the business is a success;(b) determine if the business earns sufficient money;
(c) make alot of mistakes in operating the business and find solutions for those mistakes(which they can then pass on to their franchisees);(d) fine tune the operation of the business;
(e) systemetise the busines.
A fad business is going to lead to big issues for the franchisor and franchisees if the business is not viable.
Perhaps a lesson in not listening to your lawyers about the potential longevity of a business comes from an old lawyer who once told the story about cautioning their soon to be franchisor client that this coffee craze is probably just a fad, they then grew to be one of Australia's largest coffee shops.
It is not essential that a business can be systemetised in order for it to be a successful franchise, but it helps.
Many potential franchisees want to be sold a "system" with an operations manual outlining what they do when they get up in the morning right through to going to bed again at night.
Remember that the business will need to support the franchisee and represent a reasonable return on investment as well as earning enough for the franchisor to make the whole franchise venture worthwhile.
The franchisor's role may change very quickly from a business operator to a people manager.
This is obviously not an exhaustive list of the matters to take into account in deciding to franchise your business but it is a starting point.
|Tags: Business Franchisor|