Best businesses for franchising
Franchising as a business model has worked wonders for various businesses, but is there a formula to determine which business should be franchised and which shouldn’t? No, there is no such magic formula. But there are certain traits which can help determine whether a business will be successful through franchising or not. These traits are as follows:
• Good recent performance In order for a business to be good as a franchise, it is very important that the business has shown incremental growth in the last few years of operation. This performance is measured through various terms such as sales growth, profit margins etc.
• Novel Idea Also businesses which have a novel or a unique idea are more likely to succeed. Consumers lap up a good idea which in turn increases the chances of success.
• Diverse Appeal Businesses which have a wide and diverse appeal are more likely to succeed. A diverse appeal helps in creating wide customer base, which will help the franchise to grow.
• Good systems Businesses which have good systems and processes in place are easier to run through franchising. Also since systems and processes are already in place, it becomes easier to recruit and train new people to be a part of the franchise.
• Replication Since a franchise can only grow through including more and more franchisees, the business model has to be such that it can be replicated everywhere with ease. A simple and successful business model can prove to be a great attraction for aspiring franchisees.