Recently, we’ve had a number of entrepreneurs asking us questions about whether it makes sense to franchise their businesses. While it’s truly something that should be considered on a case by case basis, we thought we’d provide some basic information to aid in the decision-making process.
Reasons why an entrepreneur might consider franchising a business include:
- Great business model/idea, but a lack of capital or unwillingness to risk one’s own capital
- Desire to get to scale quickly
Whether the business is successful at franchising depends on a number of factors, among them:
- Does it generate the steady cash flows necessary to keep both franchisor and franchisee happy?
- Does the concept resonate with (the right) prospective franchisees?
- Is the model replicable? Are the systems in place and effective?
- Will the underlying product/service meet the needs or expectations of the business’ customers, i.e. does the frozen yogurt taste good?
For expert advice on whether you should franchise your business please check out some information on our partner, The Franchise Edge. They’ll provide a free consultation to assess your business’ needs and determine whether franchising is an appropriate fit for your business.
We’d be interested in hearing any thoughts or experiences our users might have about franchising their businesses.