Can Any Business Be a Franchise?

Franchising is only for the scaleable: a “franchise-able” business is one that can be replicated across multiple units, all while making key business operations consistent across the board. Not all businesses are capable of franchising, but those that are must first prove this ability with the financial power to make it happen.

“Franchising should come after a business establishes itself to a local or regional market,” according to Entrepreneur.com. This step is essential for a brand to prove itself, as any brand must start somewhere and must make some serious noise in its first unit. Starting off with a devout following can ensure a scalable model is accepted by a target market and engineered to succeed with proven methods for growth.

However, this is not to say all businesses should take on franchising with one proven location. Franchise models are geared to be replicated, and some successful businesses are run by a team of employees that cannot be replicated easily. If a brand relies heavily on independent decision making, it may not be ideal for a franchise model.

Franchising also requires plenty of proven capital, as a Franchise Disclosure Document (FDD) is not easy or cheap to construct. FDDs must be updated each year, and it often takes legal assistance from a franchise attorney to ensure the document is legally appropriate.

This step alone can separate some independent business from franchising, which means any brand considering a franchise model must prove itself and then some.

The act of franchising also means entrusting new franchisees with a business model, which can take far more than a smile to convince an up-and-coming executive. You can’t always put the personal touches on a franchise like you can an independent business, and while some brands still allow independent freedom for franchisees, many will require new owners to follow many pre-set guidelines.