Is Your Business Ready to Franchise?

Congratulations. Your new venture is going gangbusters. Customers love you. Your employees are all rock stars. Your backers are rubbing their hands together ready for even more ROI.

You are finally ready to scale your business, achieve world domination and if time permits, even buy a small island for your retirement. 

At least you think you are. But how can you know? We spoke to two franchise experts to find out.

Can Someone Else Run the Business As Well As You?

“You know your business is ready to franchise when you have been able to run your prototype business exactly as a franchisee would,” said Ryan Zink, CEO of Franchise Fastlane, a consultancy that helps business franchisors find qualified franchisees.

The success of a franchisor depends on the success of its franchisees. The franchisor’s job is to help franchisees succeed, Zink says.

In other words, potential franchisors have got to be ready to put their money where their mouth is. If they’re so sure that their business is a good franchise opportunity, they should be ready to prove it.

“I would encourage a prospective franchisor to prove out their business using their own money and hard work before they ask a franchisee to use theirs,” he said. “Whether it is one location or several, a franchisor should have a strong understanding of how the business will perform for a franchisee when the system they have created is followed.”

Does The Business Have A Strong Point of Differentiation?

Adam Goldman, a Houston-based franchise consultant, says that having a sharp focus on a single success factor needs to be a calling card, whether it’s the level of service, quality, price, or even something smaller. 

“A lot of times in service-based business, for example, you find a very fragmented market, with no clear brand leader, and a large number of unsophisticated competitors that are not market-driven,” he said. 

That gives franchisors an opening. If your business is building the proverbial “better mousetrap,” it’s a clue that you may be ready to stand out in a noisy marketplace. 

“Maybe you’re a painting franchise and you have an app that allows you to take a picture of paint color and it will tell you the name of that color,” Goldman said. “Or maybe your painting company has a finish that’s a priority. Whatever it is, you need to have some sort of compelling reason for people to choose you over other business.”

Do You Know Which Traits Will Lead to Franchisee Success?

If a franchisor has pinpointed a competitive advantage, now they have to make sure you’re finding the right franchisees who can deliver on it.

Zink says you have to have a crystal clear understanding of what those success factors are in order to find the right franchisee who can replicate it.

“What’s most important to your current success? Is it a timely response to the customer? Is it high-quality work? Is it being the low-cost provider of your service? ” Zink asked. “Whatever it is, be sure the franchisees understand how to achieve it. Clear expectations with your franchisees should be your top priority.”

Franchising a business may not always be easy, but done right it can be rewarding.