There are many steps to Franchising a business, here are the main items that need to be accomplished before you can really take a serious look at Franchising your business.
Step 1. Decide if you want to expand. If you don’t want to expand then you should not Franchise your business. Your business is going to grow, it will change, you will have different things to do, if you want to expand Franchising a business is a low cost way to expand your business. But if you do not want to expand then you should not Franchise. Do you want to expand?
Step 2. Decide if you want to keep doing what you are doing or change what you are doing. What you are doing today is not what you will be doing in 2 years. If you clean houses today and you decide to Franchise your business you will probably not be cleaning houses after you start to sell Franchises.
Your customer is now the Franchisee not a consumer. When you have 20 Franchisees and they each call you one time per week that is 20 hours per week that you need to be able to talk to Franchisees instead of cleaning a house.
Typically after 20-30 Franchises are sold you would hire someone to help handle the work, so you won’t do it all yourself, but the point is, what you are doing today is different than what you will be doing once you have Franchises sold & operating. Are you prepared to change?
Step 3. Decide if your business can be duplicated. Your business model needs to be able to be recreated in another location with another owner. If your business is too hard to duplicate then it won’t make sense to potential buyers. Keep it simple, make it able to be duplicated.
Step 4. Figure out if you have the money to Franchise your business. How much does it cost to Franchise a business? It will cost about $35k to Franchise your business. There are required legal documents, operations manuals, contracts, employee handbooks, sales plans, marketing plans etc…all of these items need to be created in order to start selling Franchises. The cost to create all of those items will range from $30k-$40k, most of the time it will run right around $35k. If you are being quoted a higher price than that, then they are probably overcharging you because you don’t know what you don’t know. Do you have $35k to invest? Is the Franchise Developer you are working with willing to accept installments over time?
Step 5. Are you willing to invest $2k-$3k/mth for marketing to find new Franchise owners? The reality of the situation is that you need to spend money to find new Franchise buyers. Just because you have a great business does not mean people will know it is a Franchise. Are you willing to invest in to finding new Franchise buyers for your new Franchise company?
Once you have all of these questions answers you can then start finding the right Franchise Development partner.
