Are you a successful small business owner? If so, you may have considered franchising your business to help it grow and expand without having to manage opening the new locations yourself. Franchising can be equally, if not even more rewarding—you get to help someone else fulfill their dream of opening and operating their own business, and you get to see your own concept flourish and grow into different markets near you, or even all the way around the world!
However, are you really ready to franchise your business? Unfortunately, some people choose to make this leap before they’re ready, and that leads to failure that could be costly in the long run for both the franchisor and its franchisee partners. At Winmark Franchise Partners, we’ve seen entrepreneurs take this risk before they knew what they were getting into, and we’ve seen what can happen when the stress and additional challenges cause them to fail. Worse, the franchisees that have put their life savings on the line are now at risk of losing it all. When done right, franchising is an incredible business model. When done wrong, it is a tragedy for all involved. That’s why we’ve created a handy infographic which helps you determine whether or not you’re really ready to franchise your business.
This infographic is simple—it’s a series of yes or no questions which help you think about some of the important factors that make a franchise-ready business. If you’re able to answer yes to all of these questions, then there’s a good chance you have a franchise-ready business. If not, then your business may not be ready to franchise just yet. That’s not to say you won’t be ready for franchising at some point—in fact, it should encourage you to focus on this area of your business in order to truly make yourself franchise-ready in the future.
Here are some of the most important questions asked on this infographic:
Do you have multiple locations in multiple markets?
Your business may be doing well where it’s located. You may even have multiple locations in town to serve everybody near where they live. But how will you do if you expand your business out of town? What about across the state, or even across the country? If your business would struggle elsewhere, then you should think about ways to improve your viability in different markets before franchising.
Is there demand for the product or service you offer?
A good franchise offers a service or product that’s needed everywhere, or something that’s particularly popular and has a dedicated following. If there’s a lot of demand for your services, or your services fill a hole that a particular market is distinctly missing, then franchising may be a viable and lucrative option.
Are you prepared to spend the necessary money to support your franchisees?
You have to spend money to make money, and while your franchisees need to have an appropriate amount of startup capital to get their location up and going, you also need to have the money to support them. They’ll need things like marketing materials, branding, and so much more, and you’ll need to have the money to provide them with those support materials. Expect to need anywhere from $200,000 to $250,000 in capital just to cover start-up costs in year one, and up to $1 million or more in your first five years.
If you’d like to learn more about franchising your business, Winmark Franchise Partners would love to talk to you and learn more about franchise development and navigate the difficult early stages. Call us today at (844) 452-4600 or contact us to learn more.