Do you think your business model would work well in different locations around the country? Have your company’s high profits got your mental gears winding with thoughts of expansion and growth? If you’ve answered yes to either or both of these questions, your business might be an ideal candidate for a franchise deal. Before you take over your industry and become a mogul, learn the ins and outs of the process to keep from being out on your profitable derriere at the end of the business day.
Ensure You’re Well-Suited for Franchising
The harsh truth is that not every successful business should be considered for franchising. Even if you have multiple locations scattered throughout your current geographic area, there’s still a chance your business model might not perform well outside of that area or even outside of your state. This can be a hard pill to swallow, but it’s something to think about.
Even if starting a franchise isn’t the right option, you can still grow your business by taking on partners, considering debt financing or expanding slower than you originally planned. Know that there are multiple ways to reach the top of the mountain.
Focus on the Finer Points of Your Business Model
As you’re looking at the big picture of franchising, take some time to study the smaller details that are just as essential as the larger aspects of business growth. Such details include:
- The official terms of your franchising agreement
- The royalty percentage and fee of your franchising agreement
- The specific geographic areas that are a good fit for your business model
- The length and style of training you’ll offer your new employees
- The type of people you want training your new employees
- The marketing plan for your franchise
- If you’d rather your future franchisees purchase all necessary equipment and products from you or another company
Get Ready for Mountains of Paperwork
In addition to the legal aspects of opening a line of franchises, there’re more paperwork that needs to be filled out, documented, signed and submitted. For instance, there might be unique franchising requirements for the states to which you’re thinking of expanding. There’s also a very tangible possibility that your submitted paperwork will be scrutinized to the extreme by the authorities. You might have to submit additional documents before you can be successfully approved.
There’s a lot of luck, preparation and thought that goes into setting up a franchise, as you can see. Develop a solid strategy, create a plan for every contingency and be sure you’re working with the right individuals to stand the best chance of success.