As a small business owner, you have limited resources, which may make it harder to expand or grow your organization over time. However, franchising your company may help you accomplish your goal of opening multiple locations while keeping costs down. How do you decide whether or not franchising is right for your company?
Do You Have a Viable Business Model?
The first goal for your company should be to create a viable business model that can be replicated. This means getting your process right, creating a brand that consumers will recognize and making sure that there is enough demand for your product or service. If you can get those three things correct, you can start thinking about franchising your company. Otherwise, it may be difficult to get an investor to buy a franchise because it won’t be clear how he or she would make any money.
Do You Have the Time and Patience to Manage Others?
Although a franchisee will run his or her own location like his or her own business, you are still responsible for that person’s success. You also have to make sure that franchisees are following your rules as it comes to branding and how each location looks and feels to consumers. Therefore, if you are not confident that you can manage others or simply don’t care about how franchise locations represent your brand, it may be a good idea to hold off on selling franchises.
Would You Invest in a Franchise?
Ideally, you will ask yourself whether you would be willing to invest in a franchise location of your own company. Go through your financial information and ask questions like you would if you were an investor. Asking these tough questions and coming up with honest answers will help you determine if there is any reason for someone to want to franchise your business. It will also help you find any holes in your company and help make it stronger even if you don’t decide to expand via the franchise model.
Are There Any Good Franchise Owners Available?
It is important that you find the right type of investor to buy and operate a franchise location. You will need someone both with the money to run a company as well as the experience to run it properly. Remember, you don’t make any money if the owner of the franchise doesn’t make any money.
In addition to franchising your company, you may want to look into grants for small businesses or other forms of financing. These options may be more appropriate or provide greater benefits to your company if you decide that the franchise model isn’t for you or if it doesn’t work out for any reason. For more information, please check out the Ontario Centres of Excellence website.