Franchising Your Successful Business
On September 30, 2012
When you have a business that is very successful and you believe it could be reproduced effectively, then it may possibly be a suitable candidate for franchising. Franchising is a simple and, potentially, very quick way of expanding your business that doesn?t require the same level of upfront capital as other expansion methods. Employing a professional services firm for some strategy consulting will help you decide if this is the right avenue for your business. Once you have decided to go ahead, there are plenty of things you should consider.
Is Your Business Suitable and Ready?
Confirming that you have the right concept is the first step. Is your business easily translatable?In other words, is it something that you can systematise, so that another person can operate it without your input, and will it be as successful in other locations?If so, you are on the right track. The next thing to consider is whether the business is one that will benefit from economies of scale.This is one of the key areas in which franchised businesses can make money. You also need to think about whether your business will appeal to both potential customers and franchisees.
Before going ahead with the franchising model, you need to be absolutely certain that the business is ready. If there are any gaping holes in your procedures, then rapid expansion will only serve to make them more obvious. Audit your business thoroughly, from finances to IT and from marketing to procurement. Only when you are happy that everything is running as smoothly as it can be,should you look to roll it out.
Know the Law
Franchised businesses are fairly complex legal entities. Make sure you understand all the relevant laws surrounding them and, specifically, your responsibilities with regard to your own business.
Decide on Your Model
Just as no two businesses are the same, nor are any two franchise models. There are many details for you to take into consideration. Some of the most important are:
- The fees you will charge and the royalties you will take from franchisees.
- The lengthof the franchise agreements you will offer.
- The size territory you will award each franchisee.
- The geographical areas your franchises will cover.
- Training programs for franchisees.
- The type of products and equipment that will be supplied to franchisees and which ones they will have to purchase from you.
- Your marketing plan.
Recruit and Sell
Running a franchised business is a whole new enterprise, from running the original business out of which it grew. You will need employees to look after franchisees and make sure the whole organisation works effectively together. Hiring key members of staff is a critical step. Without them, you will struggle to get your franchised business off the ground.
Likewise, without franchisees, you are going nowhere, so you?d better figure out a sales plan pretty quickly. It is a good idea to have dedicated in-house salespeople to do this, because selling franchises can be very difficult. You are asking people to give up what they are currently doing ? and the security that comes with it ? in order to give you their money and work according to your rules! You need to have a very compelling argument to persuade them to do so, and you need compelling salespeople to make it happen.
Provide Support
Once your new franchises are up and running, you should provide adequate support to ensure that they thrive. Try to prepare for everything, by providing ongoing training on all aspects of the business, as well as efficient IT support services.
Source: http://www.theginlady.com/index.php/franchising-successful-business/
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