Franchising isn’t a way to turn around a failing business. Rather, it’s best to grow through franchising when things are going well. Confused? Still, wondering when to franchise your business in India? Don’t worry. Sparkleminds will guide you in finding the right time to franchise your business in India.
To know how and when to franchise your business, read this blog for more insights.
Crucial Elements That Can Help You Analyse When To Franchise Your Business in India
When deciding whether or not to franchise your business, your ability to stick with the process is more important. Businesses that are privately owned and want to grow and expand would be naive not to look into franchising as a way to spread their concept. Still, franchising isn’t an option for every business that wants to grow.
Before jumping in, businesses that want to test the franchise waters should think about a few essential elements.
Element #1. Analyse your business in terms of sales and a solid business model
First of all, you should take some time to look into your own business. Ask yourself
- what your long-term goals are and write down your brand’s vision.
- Where are you in the business growth cycle?
- Have you been running your business for a long time, or did you just start it a few weeks ago?
- Are sales at your stores going up or down?
In short, if business is slow, it’s not the time to expand into franchising. Growth through franchising is most successful when things are already on the upswing. Beware, do not try this when they need to be turned around.
Because franchising requires the implementation of a consistent model, you should also have solid procedures and processes in place. Once done, then it is time to take the leap.
Element #2. Are you ready to take on the responsibility of becoming a franchisor?
Franchising is not the ideal expansion tool for you if you are unwilling to remove yourself from the day-to-day operations of your business. You need to have experience supervising operations and training on a systemic level. This is in order to help your investors if you want to break into this field.
In other words, you’ve recorded every aspect of your business so that the team you’ve assembled can carry out your vision exactly as you’ve envisioned it. In short, if you’re a business owner considering franchising, it’s crucial to take an honest look at yourself and your company to see if you’re ready to transition away from the day-to-day operations and into more of a managerial role.
Franchise expansion is a marathon, not a sprint, and business owners must be prepared for the long haul. This is not the right way to expand your business if you want results quickly and easily. You can’t expect results right away.
To create a franchise system with lasting success, business owners must be willing to put in significant initial effort and money.
Element #3. Seek and invest in expert guidance
The actual process of becoming a franchise can begin once you have mastered operations and demonstrated that your company is financially stable. Also start thinking about getting expert help in developing your franchise concept and writing your franchise disclosure agreement.
Keep in mind that despite your expertise, navigating the waters of the franchise market can be challenging due to the industry’s stringent regulations. Therefore, it is beneficial for any new businesses entering the area to seek advice from established players.
If you need help writing your FDD, it’s a good idea to bring in franchise lawyers that specialise in this area and accountants who have the expertise to check the financials provided in your FDD.
Developing a franchise operations manual is an integral part of franchising a business. Although most participants have a firm grasp of their business and have established overarching systems, nearly no one has the 200-page, step-by-step handbook necessary to help your franchisees.
While your franchise attorney is creating your FDD, this document is a crucial component that will help you connect the dots.
Element #4. Stay focused
You must keep your mind on the task at hand as you move forward with franchising your business. This doesn’t need working 10-hour days, but it does necessitate being well-organized and prepared for any inquiries.
Most business owners, in my experience, are constantly on the go, making it difficult to keep track of everything; therefore, adopting the habit of using a calendar is crucial to the smooth operation of the franchise business.
For you to establish a franchise, you must invest both time and money into researching the business. Brands can see phenomenal expansion through franchising if management understands that franchising is a separate field and makes full use of the resources and skills available to them.
Now that you have verified yourself with all the important elements, then here’s what you can conclude to yourself about when is the right time to franchise your business in India.
The right time to franchise your business in India – When? Is it now?
Timing is very important in franchising. After figuring out that your business can be franchised, you should make sure that the time is right. As a potential franchisor, you can use a three-part framework to evaluate your company’s past success, the industry you work in, and your goals as a founder.
Let us see how.
1. The Success Track Record of Your Business
As a business owner, figuring out how well your business is doing right now is one of the most important things you can do before choosing to franchise. To analyse your business’s track record, take note of factors like.
- How long has it been for your business?
- Do you have the proper and effective systems in place?
- Do you have a strong level of economics?
- How different is your brand from your competitors?
- How do you plan to operate your business in a new industry?
2. Understanding the position of your business vs your competition in the industry
If you’re in a very competitive industry, it’s important to know where your business stands in that industry. You can figure out if your business is ready to franchise by looking at your capital needs, the skills of your team members, and your business’s ability to meet industry standards. Check if.
- Do you have sufficient capital to get started?
- Do you have the right team in place?
- Are your sales numbers showing consistency and are performing well in terms of competition?
3. Establish long-term goals when considering franchising your business
You may be ready to franchise if you have a successful business and want to use the franchise plan to grow into a multi-unit development and spread your brand.
If you’re thinking about franchising your business, you should know that it usually takes years to build a great franchise system. Since licencing is a process that can be scaled up, your plan for growth should be based on a five-year plan for success.
One of the most important signs that your business is ready is whether or not you’re ready to commit to its growth over time.
The good thing about franchising is that it can be made bigger or smaller. Focus on a Growth Strategy for the Next Five Years. It builds up slowly. Since it takes at least five years to build up sales, now might be a good time to start.
To sum up, timing is everything when it comes to franchising your business in India. Franchising needs to fit with your long-term goals and way of thinking about building an organisation. This is to ensure that you grow from your current operations, whether you have one, or more, to an organisation that sells franchises, helps franchisees, and is a completely new business.
Get in touch with our experts at Sparkleminds to know more about the franchising process and the franchise model works in India.
