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Deciding to franchise your business is a big step in entrepreneurship and there are many factors to consider before doing so. Aside from making sure you have adequate funding, there are legal processes that need to be completed, hiring that needs to be done, and branding steps that need to be solidified.
where 8 Young Entrepreneur Council Members mention some specific questions to ask yourself when considering franchising your company and why you should do so.
When thinking about franchising your company, what is one of the first factors to consider? Why?
1. Is your business profitable enough to attract new franchisees?
Small business owners are blinded by the success of a single location and have no idea if they are profitable enough to support a franchise model. A successful franchise requires a sufficient margin to support the franchisee and franchisor. Otherwise, it will be difficult to acquire new merchants. — Sean Conrad, MyAccountingCourse CPA Preparation
2. Are SOPs in place?
SOPs (Standard Operating Procedures) are an important factor to consider when franchising a company. Having an SOP in place ensures that each franchise location follows the same procedures and provides the same level of service. This is important for maintaining a positive brand image and providing a great customer experience. — Pratik Chasker, spectrum
3. What are the financial risks?
Before franchising a company, the financial risks should be clearly identified. This means taking into account all potential sources of income and expenses, as well as any liabilities or other liabilities that may affect the business. By doing this analysis up front, owners can better understand the potential financial impact of the franchise and make more informed decisions. — Kelly Richardson, infobrands
4. How easy is it to replicate a business?
What are people actually buying? Are they buying your process, logo, recipe or relationship? How easy is it to replicate your business? Help solidify your offer to.—Chase Williams, Market My Market
5. How do you achieve brand consistency?
quality management [among franchisees] Will be one of the biggest problems and challenges in franchising your company. [consumer] We maintain the same experience across all our franchises. What happens in one place affects everything else. This requires careful consideration and planning. This means making sure each franchisee has the tools, resources and knowledge to deliver superior service and products. — Blair Thomas, eMerchantBroker
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6. Do you understand the rules governing franchises?
One of the first factors to consider when thinking about franchising a company is the applicable laws and regulations. As a new franchisor, you should learn about the regulations that apply to your area, as they can vary by state and city. That’s why we recommend doing your research first and onboarding a franchise consultant to guide you through the process. — Stephanie Wells formidable form
7. Will franchising weaken your brand?
Brand dilution is the biggest concern. Margins and revenue sharing are important, but ultimately you need to make sure you have set up your franchise agreement in a way that allows your brand to grow and thrive. It can present your business in a way that is unfavorable to its image, which can harm its long-term potential. —Firas Kitane, amelie sleep mattress
8. How will franchise payments be made?
The first and most obvious factor is cost. You need to know what it will cost to set up a franchise and how you will pay for it. Most people think that the franchise owner pays automatically, but that’s not always true. You can start a loan repayment system over time. —Baruch Labunski, Safe ranking
About the author
Young Entrepreneur Council (YEC) is an invitation-only organization of the world’s most successful young entrepreneurs.