This week’s Proven Match blog is going to delve into whether or not a business should be franchised. After several successful years under their belt, many a small business owner has pondered this very question. But franchising most definitely is not a one-size-fits-all proposition. What we intend to do is provide some key questions to help you decide if your business concept can be franchised.
Attack of the Clones
A well-worn definition of franchising holds that a business concept must be able to be reproduced to work. Call it a clone, if it makes the understanding any easier. We’re not necessarily talking about opening up a second location across town, but rather—could you see a version of your business replicated successfully across the country? Would your product or service be presented the exact same way in Sacramento as in Miami? It comes down to the matter of growing your brand vs. simply growing your portfolio.
If you had to write an operations manual for your business concept, would it make sense? Could you explain the way you do business in layman’s terms? Franchises work well and become successful because their business operations are broken down into a series of procedures to achieve the common goal of profitability. Think of some of the best examples of franchises which consistently rank in the top-five today: Jimmie Johns, Subway, McDonald’s, Dunkin Donuts. They got where they are today because their business propositions are simple, straightforward and work when followed to the letter. Would yours be?
Who Needs It?
Market research should factor heavily into your decision-making process when determining whether or not franchising is a profitable route for your business concept. Does the U.S. currently need any further players in the QSR hamburger business? Probably not. But pet daycare centers and senior care services? Probably so. The reasons have everything to do with what the public is currently willing to consume—and not always in a literal sense! The available market research shows that these two aforementioned concepts demonstrate the probability of strong growth through business forecasting.
One of the biggest selling points of entering the franchise world is the on-the-job training provided to new franchisees. If you had to come up with a training program for a complete stranger to run your business, could you do it? We don’t mean the kind of training you give to a subordinate when you take a two-week vacation, but rather a demonstrable set of instructions that could guide candidates through the very processes that brought you your initial success.
The Real Cost of Expansion
If you felt your business was ready for franchising, would you create a scalable plan or go all out? Most franchise concepts on the market today started rather small, slowly moved into adjacent territories and continued a build-out based on their combined success. But this takes working capital. Do you have it? Can you get it? Are you ready for the myriad of rules and regulations necessary to operate a franchised business in a neighboring state? As we always counsel, due diligence will play a bigger part of the equation than you think.
One more thing. If after reading this blog, you’re still convinced that you could expand your operation into a franchise empire, you definitely don’t have to go it alone. With a minor amount of Internet research, you’ll find that there are numerous firms, agencies, and companies which specialize in moving a small business concept into the world of franchising.
If it’s meant to be, it will be. And you might just be the next Ray Kroc. He was a traveling milkshake machine salesman who ended up starting McDonald’s.
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As a franchisor, you’ll want to know which existing and potential franchisees best fit your business concept. Proven Match is the proven solution in determining those factors. Through our proven behavioral assessment techniques, predictive analysis becomes a predictive success for your franchise concept. If you’re ready to show your leadership by getting started, give us a call and we’ll put you on the path to a more productive year in 2017.