Is Your Business ‘Franchiseable’?
In my over three decades as a franchise consultant, I am often asked “What makes one franchise strategy succeed while another franchise strategy doesn’t?”
Rarely is there a single reason for success or failure in a franchise strategy. Here, I will examine some of the many factors that can help you create a successful franchise strategy.
As a franchise consultant, when talking with a company that wants to consider a franchise strategy for growth, one of the first issues to address is what makes a business “franchiseable”.
There are a number of issues that make a company a good candidate for a franchise strategy.
Some or all of the following questions may apply when you are trying to determine if your business is franchiseable:
- Can the business concept be duplicated?
- Can you train the franchisees and their employees to operate the franchise in a reasonable amount of time?
- How does the cost to open the business compare to the amount of money the franchisee can expect to generate over the first few years of operations?
- How much direct competition exists?
- Can you position your franchise strategy to create competitive advantages?
- What size and type of market is necessary to support one of your franchises?
- Is your franchise strategy dependent upon one or two vendors? If so, does this reliance make your franchise strategy vulnerable?
- Are any special licenses or advanced degrees required to operate your business?
- Have you been in business long enough to prove the viability of your concept?
- How complicated is it to open a new location for your business?
- Does your franchise strategy have a relatively short life expectancy?
- Do you have sufficient trained personnel to help you implement your franchise strategy initially?
- What is the growth potential for your industry?
- How challenging is it to find an affordable location for one of your franchises?
- What is the likelihood that you can add additional products or services to your business, making your franchise strategy even more profitable for your franchisees?