To Franchise or Not to Franchise?
The decision to franchise your business is not easy and is not for everyone. It entails a huge shift in the nature of your day-to-day business operations and your thinking as a business owner. How do you know if it is right for you? We have been helping business owners for decades understand the various methods of business expansion, including launching a franchise system, and we will help you make an informed decision.
If we feel that you should franchise your business, we will develop the legal documents to comply with federal and state regulations and work with you as your business expands and matures. We can refer you to resources we trust who can assist you with developing your franchise and providing resources for your franchisees once you are established.
Is Your Business Franchiseable?
Before you make the decision, it’s best to take some time to determine if you have a chance at success. Normally we ask potential clients to consider three important attributes before deciding if a business should be a franchise.
Is it Local in Nature?
A franchise needs to be local, whether it’s providing a service in a specific territory or operating a storefront in a single location. A business like ours would not be considered local in nature because we can service clients anywhere, without needing boots on the ground.
Is it Profitable?
A business needs to have good margins to succeed as a franchise system. Low-margin businesses won’t scale well. You have to be able to look at your business and determine that it has sufficient margins. You also have to thin about the unit economics: is there enough volume and profitability to to build a franchise ecosystem nationally?
Do You Have the Right Mindset?
The owner/founder needs to have the right mindset to get started. Do you want to be a coach instead of a player? You need to be able to build a team around you and impact your knowledge so that you can share in the financial success of the system.
Scalability through Franchising
Franchising is one of the best, if not the best, ways to scale an existing successful business model. You take your hard-earned experience (successes and mistakes) and create a business framework to teach new business owners how to duplicate what you have done. Franchising enables you to share in their success while protecting your downside risk if they are not successful. We have launched dozens of brands over the years and welcome the opportunity to turn your dream of building a franchise system into a reality.
Protecting Your Intellectual Property
A key component of building a strong franchise system is protecting your intellectual property. Your intellectual property includes your brand, trademarks, systems, know-how and network of suppliers. This is the heart of any system and must be protected, nurtured and grown as your system grows.
Maybe Now is Not the Time
Not all businesses are ideal candidates and many that are good candidates will franchise prematurely, which can be equally disastrous. We would rather earn your trust by telling you now is not the time than lead you down an expensive and perilous journey prematurely. Call Spadea Lignana today at 215-525-1165 for a free initial consultation to discuss whether you should franchise your business.
