When to become a franchisor?
Have you been contemplating becoming a franchisor? Has your business been flooded with queries regarding franchising? Are you getting the feeling that the time is just right to become a franchisor? Here are some things that can act as indicators when contemplating the move of becoming a franchisor. Neither great business performance alone nor consistent inquiries alone are good enough reasons, you need to have a good mix of the below mentioned reasons
Here we go…
• Established concept To become a franchisor, one needs to have an established business and not just a great idea. If you have a great idea, it is just an idea, not a business. Very few franchisees would be willing to buy an idea but many more would be willing to buy an established business. Hence if you have an idea, then develop it into a business and then you can think about franchising.
• Consistent performance If your business has been performing consistently over the last few years with regards to sales, profit margins and customer satisfaction then this is a very good sign. Consistent performance over a long period shows that the business has profit potential and also sustainability. It should be very successful otherwise no one would want to be a franchisee.
• Systems and Processes If your business already has systems and processes in place then the ground work is ready. These ensure that the running of the business becomes easier and more efficient. Also these systems help in enhancing the image of an already developed business model. Good development of these systems and processes is a very encouraging for a future franchisor.
• Opportunity If you think that there is an opportunity to leverage the brand further. If you think that by adding more people and outlets, you will further be able to exploit the brand then there is definitely a case for franchising.
• Franchise inquiries These are indications that your business is doing well. It also shows that people believe in your business format and are also interested in it. But it should also be kept in mind that 90% of inquiries will not result into the individual actually buying your franchise and hence this is just an indication of the interest people have in your business.
• Foresight It is very important to have foresight as one of your strength if you want to be a franchisor. Since a franchisor has to plan for all his franchisees and guide his business vision and foresight are very important. A person with foresight always anticipates changes and develops his business accordingly.
• Resources In order to become a franchisor you need to have adequate resources especially from a financial point of view.