Franchising a Business

Franchising a business is a long, drawn out process, and it can cost a good deal of money. A business owner who wants to succeed at franchising has to be able to think strategically. In the earliest stages of franchising a business, many decisions have to be made based on what is likely to happen in the future. If the business owner does a good job of anticipating what lies ahead, he or she will be amply prepared for future challenges and the franchise will have a high chance of succeeding.

In order to anticipate what lies ahead, business owners have to engage in research to help them determine whether there is regional or nationwide demand for the goods and services that they plan on offering through their proposed franchises. Those who fail to engage in this important step and then go on to franchise their businesses could end up failing to sell any franchise units. This would obviously be a disaster for them as they would already have invested good money and time into making the transition.

Business owners also need to anticipate the roles that they will play in the future, once they have succeeded in franchising their businesses. There is a significant distinction between playing a hands-on role in the operation of a family-owned business and being the CEO of a national franchise. The latter job involves a lot of outreach work. The franchisor has to market the business idea to prospective franchisees and to guide and teach the new franchisees. If business owners do not have the foresight to understand that their new roles will make different demands on them, then they may be in for a rude awakening when the transition finally happens.

 

The Logistics of Franchising a Business

 

Business owners who are wise enough to recognize that new roles as franchisors might not suit them should take their apprehension as a sign that franchising might not work for them. Franchising a business is not an everyday business decision. It has huge implications for the shape that a business will take and the role that those involved in it will play. Hence business owners should give any concerns or worries due consideration.

A very important step for business owners who are laying the groundwork for franchising a business to take is to look into the legal requirements for franchising. Any national and regional laws to do with registering and operating a franchise must be followed to the letter. Failure to do so could lead to harsh legal penalties and financial consequences for the franchise down the road.

Franchising a business offers big wins for customers, small business owners and franchisees alike

No matter what the mythology is, the business technique of franchising a business is good for everyone. Sure, comedians love to make fun of a Starbucks on every corner or malls that look alike in California as much as in Maine.  That is fun comedy but it doesn’t change how much the idea of franchising a business is a slam-dunk answer for big and small business alike.

Even customers who gripe end up benefiting when a chain goes about franchising the business.  People make jokes about how McDonalds or Starbucks are all the same but they don’t stop flocking there day after day.  So franchise owners will take the jokes because the facts remain that franchising a business means profits.

Customers benefit more than then know when a big company gets bigger by franchising the business.  They benefit because franchisee companies have the clout to provide products at lower costs because they are huge and they can buy in bulk and produce their products more competitively.

Customers also benefit because even though a franchisor is a small business person, the customers have a sense of value and trust that goes with the franchise name and reputation.  That means the customer gets what they expect and want every time and the franchise owner inherits a built in large customer base with money.

Franchising a business by purchasing a franchise is a win if you know what you are doing.

For the franchisee, franchising the business means rapid growth at a reduced overhead.  Much of the investment and hard work of running a franchise is taken over by the franchise owner. But the company franchising the business still makes a lot of money and continues to be a player in their market.

For the small business person, franchising a business is a huge jump start into a hugely profitable business venture. It would be a real chore to build a market presence like a Starbucks or McDonalds has and you would be competing with those monster franchises as well.  By franchising that business, the small business owner can literally go with the idea of, “if you can’t beat them, join them.”

It pays to do your homework and know what you are doing when franchising a business.  While the regulations and franchise laws are tricky, there are plenty of excellent online services that can take the bite out of that obstacle.  Go into the partnership with your eyes wide open and ready to roll up your sleeves and make franchising a business a success for you and for your franchisee and you will enjoy a long and profitable career.