Franchising is not for everyone. Every business is unique. How long you have been in business and whether you have multiple locations are considerations when franchising, but they are not the primary criteria. We reduce the answer down to a simple formula that we find works well when evaluating a business owner’s readiness to franchise.
Do you have a proven track record of growth and profitability?
People buy franchises to learn from those who are successful. Growth and profitability are the standards that franchisees buy into. As a matter of fact, the first question a franchisee prospect usually asks is, “How much can I make?” If you’re not profitable, why would someone else want to buy your franchise? Depending on your situation, it may make sense to continue focusing on increasing your profitability before franchising.
Does your business have broad consumer appeal?
Not every business has the same appeal everywhere. Have you determined the market for your business and are these markets available for growth outside of your area? If your business is geared toward your local college campus, will it have the same appeal at other campuses? If you are providing a business service, do businesses in other regions have the same needs? Not every franchise needs to grow nationally to be successful, but they do need to have at least a regional appeal or a specific market appeal. Is your market segment large enough for your business to flourish on a regional or national scale?
Is it easy to replicate or duplicate?
A key to successful franchising is having a proven system in place and being able to teach others this system. Through hard-work you have created something unique, but to take the next step in franchising you must be able to teach it to others. Is your operation complex? Does it require a large number of employees to manage day-to-day? Are there specials skills or licenses required? Answering these questions will help you determine whether you have the ability to duplicate your operation, which is critical to the success of future franchisees.