If your business is successful and is susceptible to a national and regional marketing system, you will not desire to risk sharing control or personal conflicts that come up when new investors with equal decision-making powers. To avoid such a case, consider franchising your business. However, before determining whether or not to franchise your business, review some of the following qualifiers.
- Are your products and services for franchising?
Before evaluating your business for franchising, ensure you are a potential franchise. In most cases, people who have the capacity of operating successful franchises might not possess the qualities of being franchisors. Always put into consideration personal qualities bearing in mind that franchising is beyond the business of vending products or services to customers. Additionally, as a franchisor, you will be a teacher, psychologist, trainer, perpetual hand holder and minister to your franchisees. You will also be collecting fees, extracting initial fees for new franchises to begin trading, and collecting royalties for enhancing the franchise’s life.
You will require awareness of franchisee to franchisor relationship remembering to allow some flexibility to individual franchisees to manage his own business. Treat them independently as owners of the business and not as employees. It is essential to set business guidelines for each contractor relationship in the leading contract, disclosure documents, and franchisees communication.
- Do your services and products have a market?
Do not franchise your business if you have not identified the right market for your products. Need determines marketability and competition determine the need. For example, getting a hamburger market today is hard. However, if you have unique ways of running your burger business, then franchising will not be an issue.
Demand, therefore, is not only an essential force but also important as being unique. Your unique service or product should not just attract people to get a franchise from you but also attract people who can buy from your franchisees.
- Must do market research
If your services are new and are not offered extensively by other people, but have proof of demand, determine the right locations that your products and services may sell, basing on your present customers’ needs.
You will have to retain research firms for your new product for getting extensive reports on various consumer types, needs and their power of buying. This exercise will be expensive and doing an alternative personal research by visiting the Internet, and the local libraries will help you.
Using yellow pages of different cities where you are focusing will help in determining existing competition. Conducting an internet search, reviewing business directories online and business review sites will also give you information on competitors.
Consider interviewing existing franchisees and franchisors for insights on franchising. Business people love sharing accomplishments, and this aspect will be enjoyable when researching the potential of franchising your business.
You can use government agencies for getting market research data and demographic information. You can use the relevant bureaus because they have carried out studies on regional habits of consumers in America. This information is also available on websites.
It is necessary to carry out a study on the current demand for your products and services in the event you are thinking of offering a franchise system. Your potential franchisees can also do an extensive study. If you have a feeling that the market is there, use the franchises to make their studies as a requirement for getting your license.