If you are looking to expand your business, franchising your business might be a great option. There are many advantages to growing a business through franchising – but you also need to be aware of the disadvantages. To determine whether or not you should franchise your business, we asked the members of the Young Entrepreneur Council the following question:
What tip do you have for business owners considering franchising their business?
1. Examine potential franchisees carefully
Remember that the people you bring with you will be the face of your company. So you have to be very careful who you choose. Do you believe in your business? Can they live and breathe your culture every day? And can they be great leaders? Your company’s future could be at stake. You need to keep this in mind when screening potential franchisees. Andrew Schrage, Money Crashers Personal Finance
2. Consult an attorney
It is important to get expert advice before franchising your business. Franchising is a huge process. You need to set prices, create a franchise agreement, set intellectual property protection, and more. Hiring a lawyer can make all of these steps much easier. – Thomas Griffin, OptinMonster
3. Look at the cost
First and foremost, entrepreneurs looking to franchise need to consider how much it will cost. Things like initial cost, inventory, and working capital are all things that you need to think about before starting a franchise so that you can prepare for success. – Stephanie Wells, impressive shapes
4. Have clear guidelines and processes
One tip for business owners considering franchising for their business is to establish clear policies and procedures. Document all of your processes and make sure they are as bug free as possible. Why? Because then it is easier when franchising your company to replicate a business model that is already working. – Alfredo Atanacio, Uassist.ME
Other items from AllBusiness.com:5. Have systems for everything
The nice thing about a franchise is that you don’t have to reinvent the wheel. Therefore, there should be turnkey systems for every part of the process. These cannot be created overnight. So if you build and test the systems for months, make sure you pass processes that you know will work. Systems make the franchisee more successful and ensure consistent quality. – Kelly Azevedo, she has systems
6. Watch your FICO score
A high corporate credit score is essential as you will likely have significant debt to open the doors of your first ever franchise locations. Small business loans are typically the way franchise businesses are started. Hence, being creditworthy is a must for entrepreneurs looking to do franchise business. The higher your credit, the cheaper the loan terms you will get. – Tyler Gallagher, Regal Assets
7. Take into account the uniqueness of your company
When you franchise your business, chances are it will lose its uniqueness. Your brand will take on a “cookie cutter” business profile, and this may not be the best move for everyone. Is it important to you to be authentic and unique and to stand out? Or are you looking forward to expanding your brand and optimizing your image? Depending on what is important to you, you will know if franchising is working for you. – Blair Williams, Member Press
RELATED: 5 Keys to a Strong Franchisee and Franchisor Relationship
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