Tips on How To Franchise A Business
Franchising is one of the most rapid ways to expand a business. You get to use the capital of your franchisees instead of putting up your own. Still, there are so many things to consider when you plan to franchise. Here are some basic tips on how to go about the process:
Your business must be very profitable. It is the nature of franchising that you share the profits. If your business is just moderately profitable, then splitting the income with a franchisee will make it even less desirable.
Assess first if your business is suitable for franchising. There are plenty of businesses that are directly dependent on the capability and/or personality of the proprietor. It may also be that your business’ success is due to special factors, like a restaurant with a unique and beautiful view. Keep in mind that the business concept must be transferrable to other people and locations.
Be careful in selecting franchisees. Taking the time and effort to screen suitable franchisees is critical. You must first think about the ideal profile of a franchisee. Eliminate from consideration those that are unlikely to succeed or would be difficult to work with. Other considerations include work attitude, financial capability and expectations of your prospective franchisees.
The franchisee must be happy. You are dependent on franchisees not only for the operations of their particular branch, but also for you to sell more franchises. The best way to satisfy them is to give them a larger share of the pie. Nothing can sell your franchise better than the sight of your franchisees making lots of money. Structure your contract so that the returns to the franchisee would be sufficiently motivating. Do not be too greedy or else nobody would be attracted to buy your franchise.
Have a unique and exciting concept. It would be hard to attract buyers if your business does not have anything that significantly differentiates it from other franchises.
Get a franchise consultant. Franchising a business is a complicated endeavour with plenty of pitfalls and it is almost impossible for you to be able to figure out things by yourself. It will be more expensive to reinvent the wheel instead of letting veterans on the matter be your guide.
Have your lawyer go over the franchising documents. This may seem superfluous if you have a franchising consultant since they should have made sure that their lawyers have drafted and reviewed all contracts. Nevertheless, there may be an error that may cost you dearly and it would be a worthwhile investment to have a rechecking.
Budget for continuous product research. While most remember to factor in a marketing budget, many forget that there must be an allocation for product or service improvement. Time will come when people will get tired of your offering, and your competitors will not be standing still. They may match or have an improvement over your product. Having new things cooking in the pipeline is essential to longterm success.
For those who want to grow their business fast, franchising may be a viable option. To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled, “How to Franchise a Business.” Contact (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.
Click here to view details of the seminar: How to Franchise a Business »
*Originally published by the Manila Bulletin. C-4, Sunday, February 3, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.