Expanding Your Business Through Franchising



No entrepreneur would have second thoughts of expanding their business. Mainly when they have established their brand; therefore, taking the business to the next level is just inevitable. But of course, growing your business through opening a new store or having your business franchised isn’t without any challenges, which every entrepreneur should carefully look into.

As I have often told in my numerous talks, success comes with thoughtful planning right from the beginning. Always plan ahead. Have a ready solution for every possible situation. Before initiating any agreements with other people, honestly know if the business is suited to be franchised. To establish a successful franchise, an entrepreneur needs to make other people interested in becoming franchisees. This would be based on how well the business is currently doing in the market with the thoughts that it can be successfully replicated. The business needs to have a resilient record of profitability and be able to offer a variety of things to consumers that are not just specific where the business is currently located. It is essential that before branching out through franchising, market research should be done. To know whether there is a demand for your products/services in various places and if consumers can readily welcome the brand in the target location.

It is essential that you, as a business owner, should be able to know your own capabilities as a potential franchisor. Additionally, you should realize that when you start to consider expanding your business through franchising, you are no longer just looking into one store. But you will need to have an eye and support several potential franchisees. And along with this, you will need to give up some control over how the business operates. You had your own ways of how you were able to successfully build your business. Having to deal with franchisees, you should not expect that they can do exactly how you have done it and that you need to learn to be comfortable with it. Understandably, being in a franchised business needs uniformity. However, some franchisees may have their own techniques for propagating more revenues without doing something that would harm the franchisor agreement. As long as they operate accordingly and do not give you any problems, you should just learn to take a back step in having complete control of the operations. But instead keeping an eye to ensure that the business is running the way it should be.




Are you ready to take the giant leap?

  1. Fully penetrate your current business location and check how well people patronize your products/services.
  2. Build up your brand and reputation organically than rely on other people’s investment to help your business grow.
  3. Perfect your business model. Know which products are more popular than rakes in more profit for the business. Is your location ideal? Will it work the same way as in other locations?

A Franchisor’s Role

Being a franchisor entails more challenges ahead. But overcoming obstacles is a sure sign of success. Opening your business for a franchise may both have an advantage and disadvantages. But being an entrepreneur, risks are but second nature. No Pain, No Gain, right? Here are a few tips on becoming successful in setting up a franchising business.

  1. Provide living proof of the success and sustainability of your business. You need to encourage people to know how successful your business is. Start off with a pilot franchise that would only require a minimal fee. In doing this, you can know if the processes and techniques that your business has adapted all these years can work out successfully. It is an excellent way of refining the methods to make the business viable.

As the franchisor, you should also be able to decide how you will operate. Such as considering your course of action, should your franchisee feel that if he cannot carry on running the business, will you repurchase the franchise? You also need to think of the fees that your franchisees need to pay. When they should pay them. The duration of the agreement between you and the franchisees and other essential matters should be clearly pointed out in the franchise agreement.

  1. The franchise agreement is the bible of all franchisees and franchisors, so everything written on the agreement must be fully understood by the franchisees before signing. It is best to seek a franchising expert or consultant to check on the document and ensure that it will cover every aspect of the business.

A franchise agreement should contain the following:

  • Grant of Franchise
  • Opening Date, Territory Limitations
  • Fees and Required Purchases
  • Advertising
  • Term and Renewal
  • Support
  • Protection of Proprietary Information and Other Intellectual Property
  • Training
  • Quality Control
  • Damages and Complaint Limitations
  • Obligations Upon Expiration or Termination
  • Franchisor’s Right of First Refusal
  • Relationship between Franchisor and Franchisee
  • Indemnification
  • Non-Competition Covenant
  • Dispute Resolution
  • Insurance
  1. Being in a franchising business, any mistake that one franchise commits may dampen the reputation of the whole business. This is one of the critical issues which any franchisor should keep an eye on the franchisee. However, they pay their own taxes, and all would still be trading under the same business name. Customers should receive the same kind of standard and quality of service from all branches of the business. It is vital that the franchisor ensures that the business name is protected from misuse.

All these things should be considered to ensure that if there will ever be mistakes in the process, these would just be minor issues that can be quickly resolved.

Franchising can help you expand quickly without having to spend a huge amount of money. To help you make your franchising business successful, look for the right people. They should have the same vision, know how to execute a plan, and be willing to work as a team. Everything will fall into the right places in time. 


You may contact Armando “Butz” Bartolome for questions and more information.

By email: aob@gmb.ph

FB Page: Armando Bartolome

Linkedin: https://www.linkedin.com/in/franguru/ 

Website: https://www.gmb.ph