DON’T Franchise Your Business Without Following These Three Rules

 

When you’ve rounded the learning curve in business and you see that your concept works, you may be tempted to franchise your business and grow. In fact it’s what I’ve done with my business and I couldn’t be happier with the decision. With five company stores and nine franchises either open or under different stages of development, we’re seeing the promise of the future.

Don’t mistake me, it has been a long and involved process full of lessons and growth. It has tested our patience, drowned us with work, and impacted our bank accounts, but ultimately it has been totally worth it.

If you’re thinking of franchising your business then you’ll definitely want to follow these three steps:

1. Form a committee

You know how when someone is running for office and they form an “exploratory committee”? That’s how you should approach franchising. Call your inner circle of trusted family, advisors, colleagues, and friends, and pick their brains on what they think and how supportive they would be.

Make your pros and cons list and do your research. Get your top two or three employees and delegate some research to them about franchising. Have one report back on structure, one on typical profits and shortfalls, and another on companies that help in the process and what they charge. You want as many trusted heads to weigh in as possible.

Related: 3 Reasons to Franchise Your Business

2. Ask the hard questions

You may be a visionary and see greatness in your concept and brand and just have this overwhelming urge to bring it to as many cities as possible. That reflects a beautiful entrepreneurial spirit and serves as an amazing driving force, but it can’t be the only reason you franchise. In order to franchise you need to honestly answer the following questions:

Can I afford this? I know you want to franchise to make money, but as the old adage goes, it takes money to make money. Franchising your business is an investment and though the returns can be promising, it takes a nest egg to launch it, and takes quite some time to come into the black even when you start selling them.

Is my current business firing on all cylinders? If your business could stand to be tightened up, then you shouldn’t even consider moving toward franchising. Don’t get me wrong, no business is ever finished greasing its wheels, but if you currently do not have comprehensive systems and measures in place to ensure consistency, then you aren’t ready to franchise.

Other questions you’ll want to ask yourself are: What does my end goal look like? Am I willing to surrender some control of my brand to franchisees? Am I okay with traveling and being gone frequently from my family? And, is this the best thing for my business? Once you’ve thought through all of these questions and decide you’re ready to move forward into franchising your business, you’ll want to be sure to follow the last step.

3. Choose your team wisely

Once you start putting feelers out that you’re interested in franchising, you’ll get inundated with companies promising they can do it the best, fastest, and give you the highest rate of leads and sales. Be sure you know exactly what you’re agreeing to and partner with a team that you trust and respect. It’s a long process and you’ll want to be with a company that knows what they’re doing and that takes the time to understand your goals and brand.

Related: 6 Essential Resources for Franchising Your Business

When you start building your internal franchise team don’t create positions to fit certain people. Create a position first, and then fill it with the right person. It’s often tempting to promote people into your franchise team who have been with you the longest or know your operation well. Make sure you know what is expected of the position before you promise it to someone or make a mistake that will hurt you and the person you were trying to reward.

All in all, when you decide to franchise you’ll want it done yesterday, but remember that it’s a process and it really is a whole new business. It’s a new level and a new game and you have to take time to learn the rules, learn how to play, and respect the process as a journey. Happy franchising!

For more tips on franchising your business, download Credibly Business Journal, Volume 1: Grow Your Business Through Franchising.