One of the questions franchise consultants get asked on a regular basis is “Who should franchise?” The decision of whether or not to franchise depends on your individual business and the strength of your business plan, but in general, these are the main ways to tell if you should franchise your business:
You want to expand.
Franchising is a great way to expand your business with minimal risk and cost to yourself. There is even franchise financing readily available to help you get started.
You don’t want to open more company-owned locations.
Opening company-owned locations requires a lot of capital and puts your neck on the line. While the profits are yours, the losses will be yours, too. On the other hand, opening a new franchise means that you’ll be getting royalties and fees no matter what, plus you won’t be on the hook each time one of your franchisees experiences losses for some reason.
You don’t want the hassle of hiring and managing more people.
Good help is hard to find, but franchising can help solve that problem. Rather than hiring managers who are just showing up to a job and in turn hire employees who couldn’t care less, you’ll be hiring fellow entrepreneurs who have a stake in the success of the business and will put their heart and soul into operating it, not to mention hiring people who exemplify your company values.
You want to double your bottom line.
Sounds crazy, right? It’s really not. Selling just one franchise can cover your costs for development of the Franchise Disclosure Document, Franchise Agreement, and other necessary documents in your franchise start-up kit. Selling 4 franchises could double your bottom line.
If your business has a 20% bottom line and you sell 4 franchises, each of those franchisees will be paying you a franchising fee of 5% of their overall earnings. All together, that’s another 2o% of the overall income of your franchised business, making your bottom line 40%. That income stream will benefit you for the life of the business.
If you are ready to franchise your business, it’s time to hire a franchise consultant who can help you enter the market successfully. At Franchise ASAP, we offer experienced franchise development that can enable you to get started selling franchises of your business for as little as $20,000 in just 6 weeks. Contact me today to learn more about developing your small business into a franchise.
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