{This is a re-post of an article I posted last year, about this time. I am starting to get some phone calls from small business owners who want to possibly "franchise" their businesses...}
Franchising your current business could be an
option for you, if you feel you are ready to take the next step in your growth cycle. Great wealth has been created by a multitude of
business owners who have used franchising as their growth
vehicle. If you are starting to think big as it relates to your business,
fasten your seat belt! This could be a fun ride…….
One huge advantage with
franchising, is that you can use OPM {Other People’s Money}, to fund your
expansion. Another words, if you choose instead to add more business units by
adding “company stores”, it can get very expensive.
Obtaining large loans or getting investors can be challenging, and expensive. By using OPM, they put in
their capital to fund your expansion.
Of course you will still have to make a sizable investment for infrastructure,
marketing, technology, and support, but your franchisees
open the units, and run them. One other thing…You will charge them an entry fee
{Franchise fee} to allow them to use your
systems etc, and you will get a percentage of their monthly sales
{Royalties}, too!
So in a perfect scenario, you
have the potential to receive upfront and
monthly fees from investors, who also happen to run their businesses that you gave them the model for, and they
then use your tools to become
successful. It can be a win-win.
If, however, you skimp on
development costs up front, and use shortcuts to get your franchise company up and running, it could prove to be a
disaster. Angry franchisees, and possible litigation from them, and others,
could ruin things for you, and leave a bitter taste in your mouth towards
franchising.
We highly recommend that you
use development companies that have experience in all types of franchised businesses,
and that will take their time to do things the right way.
If you are considering franchising your business, here is a short
checklist that will help you decide if franchising is the
right way to expand your business:
1. Do
you have a time tested, proven business model?
2. Have
you duplicated your concept at least once?
3. Do
you have the basis for a detailed start-up operations manual?
4. Do
you have the desire and energy to expand your concept in a big way?
5. Is
your concept unique? Does it fill an unmet need?
6. Are
the profit margins large enough to attract franchisees?
7. Is
there a formal training program in place? Or can you design one?
8. Do
you have strong relationships with lenders? Can you get investment capital?
9. Is
there technology in place, to help with efficiency?
10. Are you prepared for the legalities involved with franchise laws and regulations?
Lots to consider. Lots to do. Prepare to work really hard!
Call us if you feel now is the time to franchise your business. We have access to the best of the best in franchise development!
Call Joel Libava at 216-831-2610 or E-mail franpro at sbcglobal dot net
We highly recommend that you use development companies that have experience in all types of franchised businesses, and that will take their time to do things the right way.
Posted by: buy darkfall gold | July 10, 2009 at 02:14 AM
We highly recommend that you use development companies that have experience in all types of franchised businesses, and that will take their time to do things the right way.
Posted by: eve isk | June 29, 2009 at 11:20 PM