“Is My Business Ready to Franchise?” Rhino7 Helps Find the Answer

Many entrepreneurs have stepped back and taken a look at their startup, after the initial hard work and sacrifice are done and the business is generating some cash, when an idea occurs to them. Can I duplicate this, they wonder. Is what I’ve created here worth something to other people?

Rhino7 Franchise Development Corporation has made its name and reputation helping business owners make a realistic determination about whether their businesses are ready to franchise. Rhino7 President John Cohen says that in at least 95% of cases, the frank answer he gives an entrepreneur is sorry, but no.

Cohen says, “We are very selective about the concepts we’ll take on. A startup can be killing it in its own little market, with the owner working 60 or 70 hours a week, and offering a fantastic product or service, but still be nowhere near ready for franchising. Doug [Schadle, Rhino7 co-owner] and I have built our company on finding the diamond in the rough, that promising concept that we take and polish and turn into a franchisable business.”

Fair enough, but are there some basic attributes that make a business concept more likely to survive Rhino7’s vetting process and gain inclusion in the 5%? Cohen says there are two.

“When an entrepreneur asks me, ‘is my business ready to franchise?’, it prompts two questions that I need to answer for myself before I can respond to him or her,” he says. “First, I need to know if this potential franchise can be profitable to a buyer. When it’s all said and done, franchisees aren’t buying businesses for fun or for the challenge. They’re looking for a ROI. Rhino7 needs to offer franchises to buyers with the premise that, done right, owning and operating these businesses can turn a profit.”

Second, Cohen thinks about the price tag for what he’s considering putting out there for sale. “Our franchise offerings have to be reasonably priced,” he said. “For one thing, the asking price needs to be reasonably related to what the franchise can expect to produce in cash. For another, Rhino7 obviously is not the only place a potential franchisee can go to shop for a business to buy. The fact that our products compete for buyers in the marketplace makes pricing important, among other factors.”