Tips for Franchising your Business

Your business is successful and you may be thinking, “how do I franchise my business?” If this is a road you’d like to travel (or even just ponder for a few minutes), these tips will help you get started! Usually it starts with family and friends suggesting you should consider taking the next step to grow and popularize your brand.

The first question you need to ask yourself is, “Do I know how to franchise my business? How do I get started? What does it cost?” This article will answer some of those questions. While this strategy has worked for many businesses to become a successful franchise, they may not work for everyone.

Franchising works by opening the doors for investors to come in and purchase rights to use your brand and create, for example, a second store, using the franchise name and trademark. You will receive a franchisor fee for doing this. You may also receive royalties based upon average sales of this new store, usually between 4 and 10% to help with training, marketing, sales, operations and the like.

The best part of selling the rights to your brand is the franchisee puts up all the money required to start their new business and all the risk is on their shoulders. Other attractive features include owning and operating these locations yourself. Compared to more mainstream methods of expansion, here you can enjoy the benefits without many of the losses, not assuming risk if the expansion doesn’t work out.

The first thing we will need to look at is your capital. If you’re a small company with only one or two units, banks may not be willing to help give you a loan needed to start on your own. They will need some kind of collateral or a long history of success to make it worth their while. If you are a young business, no matter how successful your start up may be, the odds may be too much against you.

Also, with your current business, do you have enough staff able to handle hiring, supervision and training the new employees on their own? Those things can take time and a good amount of money. You can only be at one place at one time. How many times have you had employees leave due to one situation or the next? Keeping good employees can be a tough task in itself.

For these reasons, more and more business owners are deciding to franchise their business and expand without spending too much capital and taking on risk. Let’s take a closer meeting at what franchising means for your business.

Before deciding if it is right for you, you need to determine if it’s the right move and strategy for your business. Questions to ask yourself:

-Does the market for your business transcend beyond your current location? You may need advice from a franchise consultant to see the bigger picture without bias. You may ‘know’ you have a hot idea, but a franchise consultant will be those eyes and ears into whether or not your niche has a market outside your area.

-What makes your business special? It doesn’t necessary have to be a ‘never before seen’ idea, but it should be unique and attractive to investors and ultimately the public.

With these tips, hopefully you will be able to decide if franchising is for you and how to get started.
Author Bio: This post comes from Aew, who works for Naked Business Consulting. Recently having completed her MBA, Aew enjoys her job in marketing, spending time with her family and going away on the weekend.

Author Bio:  This post comes from Aew, who works for Naked Business Consulting. Recently having completed her MBA, Aew enjoys her job in marketing, spending time with her family and going away on the weekend.

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