We are constantly asked whether we think a system can become a brand. Whether a business is franchisable depends on many issues. Below is our Top 10 checklist to determine whether your business could become a franchise system:
1. Financial Security. Franchising is a low cost expansion method compared to other methods; however the cost is still there. Franchisors need to ensure that they have the capital needed to roll out and maintain a franchise program. During the roll out, there will be costs associated with legal fees, state registrations, manual creation, training costs and personnel. All of these fees must be planned for and secured prior to beginning the franchise process. These fees can range from the tens of thousands of dollars to the hundreds of thousands of dollars depending upon the size of roll out desired.
2. Reliability. Your business must be viewed in the public’s eye as reliable. However, different people view reliability differently. You may be viewed based on your businesses publicity, awareness of the brand, size, sales or years in operation. If you are solid in all of these criteria, you will typically be viewed as a “reliable” brand.
3. Reasonably priced. Your franchise must be priced affordable to your target market. If the franchise requires a lot of extensive training, licensing, permits and assistance in opening the business then it should be worth more.
4. Teachability. You must be able to teach your franchise system to others. This includes having documented systems, effective training and thorough franchise training manuals. These techniques must be able to relay the business practices, procedures, and policies in an easy to use format to the franchisees.
5. Solid Management. You must have personnel with adequate experience at the management level. Delegation is critical. You must exhibit a depth of expertise in your field. You cannot be bogged down with the small details. This is one area that the owners of the franchise cannot handle at all. You may have been able to start your business by yourself, but you cannot expand through franchising by yourself.
Stay tuned next week for Part 2 of 2 of our Can Your Business Become a Franchise – Shelton & Power’s top 10 checklist, and always remember that we welcome comments and if you would like to contact our offices to discuss franchising, we can be reached in our Tampa, Florida office at 813-625-9590 or our Austin, Texas office at 512-535-0090.