Is Your Business Franchiseable?

Hold your horses there! Before you get too excited about franchising your business, it is important you ascertain whether or not your business is franchiseable. Just about any business can be franchised provided it meets a few basic requirements.

Firstly, your business needs to be credible. It is not a good idea to franchise your business if you offer a service or product that is likely to have a market for only a short period of time. It is important that your business concept is proven, has achieved public acclaim and has an established track record. Your company must also boast experienced management.

Your business should be unique and differentiated from competitors. Make sure that your business has a competitive advantage and that you offer something more and better. Also, your business should not be suited to a certain geographical location. It should have a broad geographical appeal and therefore have the potential to be repeated in many places.

To franchise your business, it is important that it will be inexpensive and take a relatively short period to learn to operate.

Lastly, a business that is failing and not making money cannot be franchised. Your business should be doing well and making a respectable profit. If your business cannot generate at least 15-20 % return on investment after deducting a royalty, you should not be franchising your business as it will be difficult to keep your franchisees contented.

If your business meets these basic requirements, you are a candidate for franchising your business. For those companies where franchising is a proper method of distribution, it has proven quite successful. It is, however, not the right strategy for every company and many companies that chose to franchise wish they could turn back time. Care should be taken before a decision to franchise is reached.

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