Think you are ready to scale your business? Franchising is a proven route to rapid growth. Any business that can be expanded can also be franchised, in theory at least. But to be successful as a franchise, many additional qualities have to be factored in.
The first and most critical key to a successful franchise is the replicability of your business. If the concept is extremely complex or regulated, it will be difficult for franchisees to duplicate your success.
Are there systems in place to accommodate the rapid growth aspired? Are all business operations and procedures well documented?
The concept has to be easily transferred in a relatively short span of time, through a robust system and well documented procedures. Many franchisees come from very different background, without the requisite skills and experiences to start off. A developed system would help ensure the success of the franchisee, as well as the consistency of the business. Although a franchise should be easy to operate, potential franchisees can certainly bring in their own skills and qualifications.
The long-term training and support provided by franchisors defies the growth of a franchise, as goals and passion are best aligned and enforced through consistent support. Is your management team experienced and committed to the success of the franchisee?
A franchise business is largely about maintaining relationships. A franchisor often has wider interests to protect, namely the brand and its intellectual property while franchisees are most concerned about their business and profits. Although a franchise is a partnership, the level of playing field for both parties are usually not equal. The commitment to ensure successful franchisees will in turn lead to the business success.
Franchisors have to provide franchisees the tools to succeed while franchisees have to initiate their commitment to improve. The first step to the business’s long-term success starts with the franchisors.
In order to franchise a business, the model must first be proven. Having an attractive concept and a system aside, franchisees often look at the financials as a form of credibility. Successful franchises take a business that is already profitable and try to replicate it in other locales. Franchisees are more motivated when they see an adequate return in investment.
Is your business franchiseable? Astreem has developed an automated evaluation tool to understand whether your business can be scaled by franchising.
Take the test HERE.
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