What Makes a Good Franchise?

grow your business with franchiseesIf you are a successful business owner looking for a low-cost, low-risk way to expand, you’ve probably considered franchising- and for good reason. Franchising your business is a great way to grow, but is it right for your company?

Simply put, a good franchise is one that is profitable, trainable, delivers a unique desirable experience, and fits your skill set.
Let’s take a closer look at the 4 characteristics of a good franchise. A successful franchise business should be:


Generally, a good franchise should be able to generate a true net profit of 20-25%. This allows the franchisee to afford a royalty of 5% and still have enough left over to make a living. This is often described as a 20% ROI on the franchisee’s investment after paying himself and covering his expenses. In the case of a food related franchise, the labor and food cost should be no more than 55% of the total. This leaves enough room to be successful on a reasonable sales volume.


The training you give the franchisee should be understandable, repeatable, and feasible for a reasonably capable employee. As always in business, it is so important to recruit the type of people who reflect your values. This is especially true in the types of franchisees you appoint. It is also important that the franchisees likewise hire employees who reflect the company’s values.

Provide a Unique Experience

What is a unique experience? It is one that your customers will want to repeat, one that they will tell others about and others will do the same. It is so easy to beat your competition by simply hiring and training with this in mind. Emphasizing this skill set from the start will not only ensure success for your business, but will give your employees a good foundation as they continue their careers, no matter what they may be.

Use Your Skill Sets

As a business person, it is vital to know and understand what you are good at. If you are a people person, a retail franchise is a good fit for you. If you are a detail person, operations are the place to be. Place yourself in the right slot and hire the skills you don’t have.

It’s actually very simple to design and execute a good franchise- the key word being simple, not easy. Here’s a note that Apple gives all of their employees:

There’s work and there’s your life work. The kind of work that has your fingerprints all over it. The kind of work you’d never compromise on. That you’d sacrifice a weekend for. You can do that kind of work here. People don’t come here to play it safe. They come here to swim in the deep end. Something big. Something that couldn’t happen anywhere else. Welcome.

What do you think would happen if you adopted that attitude in your franchise? Think about it.

If you are ready to franchise your business, it’s time to hire a franchise consultant who can help you navigate the process successfully. At Franchise ASAP, we offer experienced franchise development that enables you to franchise your business and start selling franchises in just 6 weeks. Contact me today to learn more about expanding your small business through franchise sales. 


Image courtesy Ambro via FreeDigitalPhotos.net

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