If you have a small business that can be effortlessly replicated, franchising is one of the best ways to expand it. And if you handle it the correct way, you can absolutely pump up the profitability.
The question here is, “How and when do you switch to selling franchises”
Can your business be replicated?
You have to examine if your company can be a homerun anywhere. It’s simple for entrepreneurs to underestimate how much value they personally add to the business, however, for a company to translate into a flourishing franchise, it must be ready to survive the everyday challenges and do as such without the founder’s personal touch.
Entrepreneurs should expect to have investing accomplices and in addition personal financial stake in the venture. Costs will rapidly multiply for brand development, courting potential franchisees, repaying experts and particularly covering legal fees. Franchises can’t get off the ground without inexhaustible cash flow, and if the franchise flops, it could all vanish. Individuals frequently look too hard at the potential earnings without considering the potential loss.
1. It must be pilot tested with company-claimed and worked outlets
2. Business must be successful, unmistakable and replicable
3. Take legitimate professional advice – Solicitor, Banker, Accountant and possibly a Franchise Consultant.
4. The Franchise Agreement must be composed by an accomplished Franchise Solicitor
5. Take time to compose an operations manual
6. Choose franchisees precisely and gradually
7. Avoid overselling and forecasts
Source : BusinessInsider