As a business owner, you may have considered franchising your company. Franchising can be a great way to expand your business, but it may not be the best option for all business models. Therefore, it's important to understand the ins and outs of franchising and what it might mean for your existing business model.
To help you make this decision, we asked the experts of Forbes Coaches Council to share some questions you should ask yourself to determine if a franchising model is suitable for your company. Here are their recommended considerations before you make the leap.
1. Can I provide the necessary support to franchise owners?
In order to be a successful franchise, business owners need to provide a clear infrastructure, brand and on-going support to franchise owners. Without this added-value proposition, it is difficult to attract and retain franchise owners. Many business owners get excited about franchising, but do not think about what it takes to continue to be of value so that they can expand in a profitable way. - Susan K. Wehrley, BIZremedies
2. Am I OK letting go of 'individualism' in my business?
Franchises usually leave little room for individualism. Before deciding to go the franchise route, the most important question is, "Do I want to do it their way or my way?" At its face, it may be a shallow question; however, entrepreneurship requires personal touches that are difficult in a franchise setting. If individualism is part of the calculus, the franchise route may not be viable. - Kamyar Shah, World Consulting Group
3. Am I comfortable going corporate?
When deciding to franchise it is important for companies to decide and ask themselves if they are comfortable losing their flair and becoming more corporate. By franchising, you’ll have to create more systems and processes that will limit your ability to change quickly. This will mean the entrepreneurial aspect of your company will slow down and the systems and processes will become more prevalent. - Jon Dwoskin, The Jon Dwoskin Experience
4. Has this type of business been franchised successfully before?
There are many questions business owners should ask to help determine if franchising is suitable for their business. The first question is if that type of business has been franchised before and if they have successfully launched more than one location, making enough money to allow for a middleman. This is important because it is expensive to begin and may take years to recoup the initial investment. - Susan Scotts, SScotts.EsourceCoach.com
5. Can we maintain brand integrity?
You worked tirelessly to develop your business. Can you create a plan that will provide the same level of customer experience you currently offer? Franchising requires trust, deep strategy with perfect execution, accountability and excellent communication with franchisees to maintain the integrity of the brand you've created through years of your own blood, sweat, and tears. Satisfy your customer. - Christine Rose, Christine Rose Coaching & Consulting
6. Do I have the necessary business skills to develop and manage a franchise?
If you're considering franchising your business, ask yourself the following question: Do I want to start an entirely different business? It's easy to believe that franchising is a logical extension of the core business. It's not. Running a franchise system is a separate and distinct enterprise that requires a different skill set than your core business. - Mike Bundrant, iNLP Center
7. Do I have replicable, measurable processes?
Business owners should ask this question before franchising: “Have we articulated replicable, measurable processes that serve a model for success on all our Key Performance Indices?” Maintenance of standards is critical to the success of any franchise brand. Your name must elicit trust that your clients can count on. - Oyejoke Coker, INL NIG
8. Will others be willing to invest in our vision?
Is our vision so compelling that individuals will be willing to invest their heart and soul—and life savings—because they believe in what we do and want to do it too? Will franchisees be able to personalize our company's offering better than we could do it ourselves? Working together to tap into the creative energy of the franchisees is what makes a franchise enterprise successful. - Bill Koch, Bill Koch Leadership Coaching
9. How strong are my leadership skills?
What is your endgame? What is important to you in this business? What is your greatest passion? Franchising can change from being you leading your business to lead teams of others who are running duplicates of your business. As a franchise owner, business shifts to running the franchise (brand message, product and business consistency, overall alignment, legal, develop leadership, etc.). - Christy Geiger MCC, CPCC, Synergy Strategies Coaching & Training
10. Is licensing a better option for me than franchising?
Take the time to compare a franchising model to a licensing model. Franchising requires a lot of services and ongoing marketing support while licensing is more localized to the person owning the license. Either way, issues of leadership development and team development will be critical during the journey. - Mark Samuel, IMPAQ Corporation
11. Can I teach our culture?
Culture is designed and built by leaders, sometimes through an organic, emerging process, and other times it's more proactively taught. When considering franchising, a leader should ask, "How will the right culture be taught and caught?" Culture is like oxygen, helping the mission, vision and values breathe. Leaders often think too little and too late about building their culture—that's a big miss. - Mitch Mitchell, FMG Leading
12. Do I want to franchise for the right reasons?
The biggest mistake I've seen leaders make is growing their business, via franchise or otherwise, for a bad reason. Bad reasons include, "to make more money," "to prove that I can," "to provide more jobs," and many others. The best reason is that the growth of the business is an expression of who you are and to learn about yourself. That's the only reason that's going to make the work worth it. - Josef Shapiro, Clear and Open
13. Will franchising ultimately help me achieve my bigger goals?
For entrepreneurs, having a clear purpose for the type of impact or results to be obtained from a business enterprise is the most important baseline to establish. When considering whether a franchising model is suitable, business owners should ask themselves whether they will ultimately achieve their desired ends. Without clarity of purpose about desired outcomes, no business model will be helpful. - Lillian Gregory, The Institute for Human and Leadership Excellence
