If you’re thinking about franchising your business, you’ll need to carefully weigh the odds of success before taking the leap. Here’s a look at some franchise essentials that can better your chances.
According to Entrepreneur, your business needs to have a compelling concept. “To really be successful, a franchise has to capture the imaginations of would-be business owners. It’s much easier to market a franchise with built-in appeal than one that sounds like some humdrum business.” What sets you apart from your competitors? If you have a truly original concept, you’re halfway there. But that concept must also be marketable. You’ll need to be able to effectively communicate and sell its benefits to both future customers and franchisees.
This is another key factor in determining whether your business will be successful as a franchise. Your franchisees will need to replicate every detail of your business operations. Is this something that can be spelled out in an operations manual? Will you be able to train franchisees to manage the business in the same way that you have, implementing all the same techniques that have made it successful? Take a look at these franchise quality control tips to better understand what’s required in successfully replicating your business model.
Another important consideration: is your product or service something that can be offered in any location or market situation? If your business’ success relies too heavily on a specific individual or location, you’ll have a hard time repeating that across multiple franchisees.
Even if your business has been profitable, remember that franchisees have to make enough money to cover their income, pay upfront fees and ongoing royalties, and also yield a sufficient return on any money that they invested initially to get the franchise up and running. You’ll need to prove that your business is consistently and predictably turning a profit.
To learn more about what makes a franchise successful, check out Entrepreneur’s Top 10 Franchises of 2016.