Do you have a successful business that you would like to expand? Have you been thinking lately “is my business ready to franchise?” Let us explore if you really are ready to franchise your business and understand what are the key components required to get started with franchising a business.
India currently has 10000 companies using the franchise route to business expansion, while it is projected that more than 5000 companies are currently in the process of franchising their businesses and will be in the marketplace in a few months. It is one of the most preferred formats of business expansion in most developing economies, while a host of products and services reach the final consumers. You could now use this proven methodology to franchise your business too.
Sparkleminds believes that if your business is “Franchise-able”, you should seriously consider this option. It is quite normal for most entrepreneurs to be unsure of this one question of, “should i franchise my business?” , now or later.
Becoming a Franchise is the fastest, most efficient, and, in most cases, the most cost-effective way to expand a business, but the transformation of an independent business to a Franchise system is not so easy. It takes money and a considerable amount of time. Before you commit to any plan, you need to determine if your business is “Franchise-able”. Once you have set aside some resources, you are ready to franchise your business with the following parameters in place.
Self-Assessment Check: Evaluate your business if it has to succeed as Franchise and take the self-assessment check to see your readiness on franchising:
Prototype Development : Your business should have at least one unit or territory operating successfully and profitably— but it is preferable that your business has three or four units, or coverage of a substantial population or territory. You could be running these units on your own, or within the family or a known circle of people.
Brand Registrations : You should have a register able mark for your business. If you sell products, you must register a trademark; if you sell services, you register a service mark. This is essential since your goal is to have an identifiable brand which is protected.
Business Potential : The business should have long-term market potential. Businesses that capitalize on fads are not good candidates since the product or service may be passé in a few years or less. Try to make a reasonable assessment that the business product or service will be in demand for at least the next 5-10 years. Businesses that are unique in some way lend themselves well to Franchising.
Training The Franchisee: The operation of the business must be teachable. Remember that in many Franchises the Franchisee has no prior knowledge of the business. The smallest details of operating the business must be taught to the Franchisee so that he/she can be successful. Many businesses are not transferable to others because most have the decision-making and day-to-day operations emanate from an owner who has honed certain skills over many years and has certain talents, which cannot be taught. Hence you should be able to adapt to a business module where other people could be trained to do a specific set of things and it is not limited to a specific skill set which only the owner possesses.
Resource Allocation: The business owner should be sufficiently capitalized so as to not cut corners on the legal and consulting expense necessary to lay the franchise foundation and to formulate a strategy. In addition, as a Franchisor, you will be responsible for the formulation and implementation of a training program and must provide a comprehensive manual for Franchisee use. This could begin with a standard operating procedures format in the beginning and once your operations are standardised to a higher degree, you could collate the operating procedures and begin your manual preparation.
Team Management : Lastly, the Franchisor should have employees on staff to administer to Franchisee needs; this may entail additional hiring of personnel or at least you could use our outsourcing your franchise recruitment module that ensures that new franchisors do not end up spending excessively on salaries and recruitment and training costs for recruitment of franchisees.
In fact we can work closely with you in helping you understand the minimal resources that you would need to put in place to start franchising your business and how you could spend additional capital thereafter whilst you see successful franchisees coming up. Please understand the Sparkleminds franchise consultancy model and how we could help you create a franchise success story.