1851

Before a business owner can confidently franchise their brand, they must first understand their unit-level economics, development costs and more.&nbsp;Now, as the world emerges from the COVID-19 crisis, there will likely be a large number of qualified candidates looking for <a href="https://1851franchise.com/the-road-to-recovery-how-the-franchise-industry-will-bounce-back-post-coronavirus-2713099#home">new franchising opportunities</a>. 1851 Franchise spoke with franchise industry experts to learn more about how a company can know if they are ready to franchise and take advantage of this demand.<h4>A Proven, Scalable and Repeatable Business Model</h4>When deciding whether or not to franchise, step one is evaluating the current state of the business. In other words, are the locations already in operation healthy and lucrative? If so, is the business model specifically designed only for those areas, or can it work anywhere?In 2009, at the height of the recession, <a href="https://www.linkedin.com/in/valerie-mccartney-87006b7?utm_source=1851franchise.com&utm_medium=article&utm_campaign=when-is-a-business-ready-to-franchise-2715589" target="_blank" rel="nofollow">Valerie McCartney</a> found herself developing <a href="https://www.thebrokenyolkcafe.com/franchising/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=when-is-a-business-ready-to-franchise-2715589" target="_blank" rel="nofollow">Broken Yolk Cafe’s</a> first franchise as a favor to the owner, whom she had befriended as a patron of the restaurant for several years. <a href="https://1851franchise.com/franchise-development-leaders-valerie-mccartney-of-broken-yolk-cafe-2711431">Through her extensive franchise experience</a>, McCartney knew the time was right to franchise Broken Yolk Cafe. The brand offered a quality, profitable business opportunity and was a concept primed for expansion as the economy began to recover. Over the next few years, McCartney facilitated what would eventually turn into a national franchising program of over 30 locations.&nbsp;When it comes to how she knew the business was ready to franchise, McCartney first points to one thing: proof of concept.&nbsp;“In my opinion, proof of concept comes with at least a year and a half of operation,” she said. “It scares me when people have only been open for six months and they take their eye off the first unit to try and grow. The first six months may be great because of the honeymoon period, but brands need to stay the course and make sure they <a href="https://1851franchise.com/5-ways-to-grow-from-emerging-to-established-brand-2709165">work out all the bugs before starting to grow</a>. Once the first unit is successful, they can open up a second unit and, if that is successful, then start franchising from there. Basically, the first couple of stores need to make money so you are franchising a concept that someone will actually make money with.”&nbsp;<h4>Franchise Cost Considerations&nbsp;</h4>Once the unit-level economics of the business are in place, it is time to look at the bigger financial picture.“It is important to remember, if franchisors do this right, they are going to be in for at least <a href="https://1851franchise.com/cost-considerations-when-franchising-your-business-2485#stories">$100,000 in legal fees</a>, operation manual costs, trademarking, training, registration, FDD creation, marketing and more, before they ever sign their first franchisee,” said McCartney. “Most people who have only opened up one store don’t have that kind of capital lying around to spend. Entrepreneurs should be optimistic, but they also need to be cautious and take calculated risks.”&nbsp;For example, franchisors should take the time to figure out how much money they will need to spend to train someone to run the business successfully as an owner, as well as how much money they will spend on a franchise attorney when crafting an FDD.&nbsp;As costs like this add up, franchisors need to remember the franchise fee and initial investment are also going to go up for prospects. If there is too much cost involved in running a franchise, the pool of qualified buyers may also shrink. Franchisors also need to ensure that the fee structure is flexible enough to allow for adapting to local market conditions.&nbsp;<h4>Franchise Support Infrastructure</h4>After business owners decide whether they have the financial means to franchise, there’s still one more thing to consider: support. As franchisees sign on to develop a brand, they’re going to rely on a corporate team to help get their businesses up and running. That means franchisors are responsible for guiding their owners through the grand opening process, especially as they’re first launching their business opportunity.&nbsp;If business owners do not feel as though they have the bandwidth or expertise to provide day-in and day-out support of franchise owners, it may not be time to expand yet.Overall, even if customers are repeatedly asking that the business open in new areas, the true indicators of whether or not a business is ready to franchise are based around the internal health of the company. With an effective business model and a solid infrastructure in place, business owners can be sure now is the right time to franchise their business.&nbsp;

Franchise Readiness: Evaluating Business Model, Costs & Support | 1851 Franchise

1851 Franchise

Just because a business could expand through franchising, doesn’t necessarily mean it should — yet.

When Is a Business Ready to Franchise?

when-is-a-business-ready-to-franchise

SweatHouz

SweatHouz SWTHZ Franchise - Hunter and Mallory Mitchem - Franchisee Feature - 1851 Franchise

From Aerospace to Wellness: Hunter Mitchem’s Journey to a SweatHouz Empire

sweathouz-franchise-hunter-mitchem-6g

Onigilly Japanese Kitchen

Onigilly - Low Operating Costs Drive High Returns for Franchisees - 1851 Franchise

Maximize Your ROI: How Onigilly’s Low Operating Costs Drive High Returns for Franchisees

onigilly-franchise-fast-casual-franchise-opportunity

Layne's Chicken Fingers

What Is the Layne’s Franchise Disclosure Document, and What Will I Find in It?

laynes-franchise-disclosure-document

Athletech News: How SWTHZ Delivers on Wellness Demands of All Kinds

swthz-delivers-wellness-demands-contrast-therapy

TruBlue Home Service Ally

Why Protected Territories Matter and How the TruBlue Franchise Delivers

why-protected-territories-matter-and-how-the-trublue-franchise-delivers

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Bed Bath & Beyond - Franchise Expansion - Retail Strategy - 1851 Franchise

Bed Bath & Beyond Launches Franchise Model as Part of Comeback Strategy

bed-bath-beyond-franchise-expansion-retail-strategy

Senior Entrepreneurship - Franchising - 1851 Franchise

Senior Entrepreneurship Is Rising — And Franchising Is a Key Outlet

senior-entrepreneurship-franchising-silver-startups

U.S. Government Shutdown - Impact on Franchises - 1851 Franchise

Government Shutdown Stalls SBA Loans: How the Shutdown Could Impact Franchises

government-shutdown-impacts-sba-loans-tourism-franchises

Subway Franchisees Resist Expensive Remodel Directives

subway-franchisees-resist-expensive-remodel-directives

The American Franchise Act: What It Means for Franchisors and Franchisees - 1851 Franchise

The American Franchise Act: What It Means for Franchisors and Franchisees

american-franchise-act-joint-employer-standard

image of franchise deep dive from 1851 franchise on doody calls franchise authority brands

DoodyCalls Franchise Costs, Fees, Profit and Data for 2025

doodycalls-franchise-deep-dive

image of mellow mushroom deep dive into financials article from 1851 franchise

Mellow Mushroom Franchise Costs, Fees, Profit and Data for 2025

mellow-mushroom-franchise-deep-dive

How goGLOW Turned Clean Beauty Into a Scalable Franchise and Why It’s Accelerating Now

goglow-clean-beauty-tanning-franchise

How Capriotti’s Sandwich Shop Has Expanded Into One of the Restaurant Industry’s Most Exciting Franchise Opportunities

meet-the-franchisor-capriottis-david-bloom

Top Education Franchises To Consider for 2025 - 1851 Franchise

Top Education Franchises To Consider Investing In for 2025

top-education-franchises-investment-opportunities

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

Top Early Childhood Education and Child Care Franchises for 2025 - 1851 Franchise

Top Early Childhood Education and Child Care Franchises for 2025

early-childhood-education-child-care-franchises

Top Arts and Creative Learning Franchises for 2025 - 1851 Franchise

Top Arts and Creative Learning Franchises for 2025

top-arts-creative-learning-franchises

1851 Franchisee Spotlight graphic with photo of Barb Volk and KidStrong logo

Why This Orangetheory Fitness Franchise Owner Is Developing KidStrong Franchises

kidstrong-franchise-owner-barb-volk-2025

When Is a Business Ready to Franchise?

MORE STORIES LIKE THIS