Franchising your business out is not a simple task. Selling franchises is not the method of growth for everyone. In a lot of ways you give up direct control. However, in order to be a successful franchisor you have to keep control of your brand. Franchising your business can definitely make you money. It can help your business and brand grow without the same type of investment as continuing to open corporate stores. This does come at a price though, and it is best to be prepared for it.
One of the first questions to ask yourself is, “Can my business be duplicated in a different location if I gave someone instructions?” Understanding what made your business successful is imperative. Is it something that can truly be duplicated without you or your key players’ presence? Many companies over the years have franchised without tough enough restrictions. In turn, they have grown too quickly resulting in failure.
Franchises – Famous Examples
McDonalds and Subway come to mind when you think about successful franchises. There are many people who want to own their own business, but do not have a product. Or they may not have enough money up front to do something from scratch. They may very well be an excellent operator if someone just told them what to do. Franchises are the perfect opportunity for this type of entrepreneur. However, it is important to keep in mind that for every successful franchise, there are likely a few that have failed. A bad operator, or franchisee, will make your business look bad very quickly. This is only one aspect of many that you lose direct control over. You could end your agreement with them, but that is a legal process that takes time.
Franchising is complex. You will need to hire an accounting firm that has a complete understanding of many of the tax laws and regulations that will apply. The accountants at Numerico are prepared to navigate the waters of growth with you. This includes the possibility of franchising your business.