Starting up a business is a dream of so many people. It allows them to have the freedom to work the way they want and lets them earn at least 10x the amount that they earn from their 9-5 job. But along with it are also risks. After a few years of sustaining a business, an entrepreneur may feel the need to expand. There is an option to open up a second branch and make the company available for franchising.
With franchising, it involves a lot of risks. But we know that no successful entrepreneur has turned his back away from all these risks. After all, if not for trying, he would never know how his plans would turn out. Look how Jollibee became so successful after so many years. Having 1,100 stores as of 2018, 950 of which are operated in the Philippines. When you know that your products or services are being patronized by so many people. And it turns out that the demand for them may no longer be met by your existing resources. It may be a tell-tale sign that you are ready to expand your business. But of course, you cannot just jump to that next level without being equipped with enough resources and assistance from experts to help you prepare for the long haul.
The first franchisees are likely the people who have been long-time customers of your existing business. They may have seen the potential of the products and services you offer and develop an interest in investing in the brand they have known and trusted. The following franchisees would be enticed by how your business is going through marketing and publicity. Learning about your franchising system will make them want to be part of a growing business.
How To Know If Your Business is Franchise-able
Before any entrepreneur takes their business to the next level, entrepreneurs should be able to realize the following:
- It is not enough that you have a great business concept. Entrepreneurs should be able to have a complete understanding of what their brand is all about and at the same time be able to easily verbalize its concept and plan. Having a franchise is about having a system. Therefore, entrepreneurs must organize operations, proper communications, and a method that can easily lure in new customers.
- Entrepreneurs should also be able to foresee if a franchise can survive on a day-to-day basis without them having to be always there. The franchising concept may seem uncomplicated – just having to set up another branch with the resources needed. But more than that, the survival of the business is essential.
- When an entrepreneur decides to have his business franchised, it would also mean dealing with so many people to help strengthen the brand. This includes advertisers, graphic designers, legal assistance, training, support, and public relations. A franchisor’s responsibility does not end once he allows another person to start his business in another location. He needs to ensure that everything is uniform across all franchises to maintain a single brand that the public has known from the start.
- Diving into franchising the business entails a lot of money. And an entrepreneur may feel that his company is ready for franchising. Still, without the financial resources available, it is unlikely to happen. Therefore, an entrepreneur may need to get a loan or seek partners willing to invest in the business. The entrepreneur must realize that the potential profit that a franchise may bring to his table are also potential losses. Again, that is the risk that entrepreneurs are taking each time they start a business. Remember that the costs would immediately increase because of further brand development, hiring experts, covering legal fees, and searching for prospective franchisees.
- All of us dream of being successful either with our own careers or business. But, an entrepreneur should have a clear vision that his franchise business can indeed be possible in the real world. I know one company that operated for just a year. And since there are so many people flocking in, she decided to have her business franchised. She may not have sought someone to help her through her decision. Indeed, some people became interested in having her company franchised. Still, she didn’t seem to be prepared with all the responsibilities that a franchisor would have. She may not have been able to think it through how franchising the business would really work out. It disappointed all the franchisees, and one by one, they all closed up.
It takes a lot of years to be able to see how franchise-able your business can become. It is like starting up a new business wherein it entails a lot of work to do. A clear understanding of the business is crucial. The brand has to be maintained across all franchisees. The franchise disclosure agreement should be followed. If these are not met, it is unlikely that a franchisor would ever earn from the franchise, lest he loses more.
Looking for your first franchisee is crucial. The franchise business should come out positive. Otherwise, it may be the first and last franchise you will ever have. Therefore, you need to wisely choose the people who would invest in your business and not be just after the money they initially paid you. Maintaining a good reputation in the market is very important. It will be your ticket to success as a franchisor.
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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
