If you have interest in growing your business at a rapid pace, you may have considered franchising your business but may have a variety of questions about the process, what it entails and which types of businesses franchising works for best. Generally, franchising may be an option to grow your business in circumstances when the business model can be easily replicated.
Understanding what franchising is can be fairly simple, however, as with many business endeavors, properly executing the process can be more complex. In addition, there are different franchising options and structures to consider. Basically, in some types of franchise situations, the franchiser owns the rights to the business name or trademark and sells its use to the franchisee. In other types of franchise situations, the business format is provided to the franchisee.
The second type of franchising requires an ongoing relationship between the franchiser and franchisee and may include help with site selection; development of manuals for running the business; training; supplying products; developing marketing plans; and securing financing. When considering franchising as a growth option for your business, it can be important to consider if you have an attractive service or product; a teachable business concept; and a business model that is easily replicable.
To create a franchise system that is sustainable it is also important to be aware of, and familiar with, the federal and state regulations that may impact your business and franchising opportunities. Because the success of any business endeavor may depend on understanding the process, such as in the case of franchising, it is important to be familiar with relevant factors to consider, the process itself and how to properly comply with any laws or regulations that may apply. Using this method to approach a business endeavor may help provide growth opportunities and future success for your business.
Source: Small Business Administration, “Build Your Own Franchise,” Accessed Jan. 17, 2014