Franchising your business is a great way to achieve exponential growth using other people’s capital. However, franchising your business can be a stressful process that is filled with serious risk. With the right support, franchising can be a great expansion strategy that will help your business grow. Here is a look at the different steps involved in franchising a business.
Evaluate Your Business
Think about your concept. Is it right for a franchise model? Do you have all of your processes and systems documented? Is it replicable? In other words, could someone without your vast experience, take your business model and make it work in another market, and deliver a consistent and successful brand experience to their customers? Is it viable long-term, or is it simply a fad? Is the success due to your particular market or region, or is this a concept that would work anywhere in the world? Do you have a unique selling proposition that has defendable barriers to entry? At Winmark Franchise Partners, we want to work with businesses who have a viable, replicable concept that will be successful over the long haul. Do your own self-evaluation to determine if your business is right for franchising.
Next, do an evaluation on yourself. Not every entrepreneur will become a successful franchisor. Do you have the right mindset to be a strong franchisor? Do you believe in a servant model? Can you give up control to allow your brand to be run by independent business owners? Are you as committed to supporting your franchisees as you were in supporting your business? The role as a franchisor is far different than the role as business owner, and the skill set to succeed will also be different. You need to determine if you have what it will take to be as successful as a franchisor as you were as an entrepreneur.
Ensure You Meet Financial and Legal Requirements
Franchising your business can be a bit difficult, but having a consultant on your side to walk you through the steps can be very beneficial. Franchising is often a good choice for businesses due to the low capital required and the ability to expand, but understanding what financial and legal requirements are involved is important. Depending on the length of your franchise agreement, you will be making a several year, if not decade, or more commitment to your system and your franchisees. This commitment comes with financial obligations as well as legal risk if you do not fulfill your commitments. Given that over 41% of all franchisors have less than 10 franchise units, the argument could easily be made that too many people get into franchising before they are ready. Working with a consultant like Winmark Franchise Partners can help you make smart decisions before it is too late.
Build Your Franchise Model
Having a successful business does not mean that you can simply take that model and throw together a franchise agreement and begin selling it. The foundation for your franchise model still needs to be built, and dozens of decisions need to be made on fees, royalty percent, territory analysis, support and training infrastructure, operations and training manuals, marketing planning and support, and sales development. All of these decisions should be determined before you even put together your franchise disclosure document and franchise agreement. At Winmark Franchise Partners, we can help you every step of the way through the starting process to ensure that your foray into franchising is a successful one.
Contact us today at (844) 452-4600 to discuss your needs.