How to Franchise Your BusinessOn November 6, 2019 by Raul Dinwiddie
Have you ever thought about franchising your
business? If not, you should know that franchising is
one of the most dynamic growth vehicles available to you.
For example, in the United States alone, franchising is estimated to represent 40 percent of all
retail sales. We’re talking hundreds of billions of dollars.
And while restaurants are a major part of it, franchising also includes healthcare,
education, automotive services,
finance, lawn care,
staffing, and many other industries.
If you think that you might benefit from franchising, the first thing to ask is if your business
is, in fact, franchisable.
Is it profitable? Does it provide adequate returns?
Is it credible in the eyes of potential franchisees?
It needs to be easily cloned. And if it’s a little unique or sexy, that
helps too. Legally speaking, a franchise is defined by
FTC Rule 436 which says that a franchise is a business relationship in which three elements
are present. The franchisee is entitled to use your trademark.
The franchisee is provided with training and assistance.
And you, as the franchisor, collect a fee or royalty.
If you have all three, you have created a franchise—regardless of what you call it.
And, since violations of franchise laws can have significant consequences, you should
certainly talk to a professional before you plan your business expansion.
So, why is franchising so popular? Well, it solves three basic problems: money, time,
and people. By using other people’s money, you’ll
be able to grow your business without the capital or bank financing required to open
more company-owned units. You’ll save tons of time
on work the franchisees do —finding sites, hiring people, training staff, and opening
the location—enabling even faster growth. And you know you’ll have the right people,
who are highly motivated by their own investments and are in it for the long haul.
In fact, studies have shown that franchisees can outperform company managers
by up to 30 percent. If you’re interested in franchising your
business, there’s one company that can help. The iFranchiseGroup has a 12 point test that
can help you determine if your business model is, in fact, franchisable.
And if it is, we can also help you determine if franchising is really the best course of
action for your particular business. To receive a free evaluation,
plus a free 90 minute educational video on “How to Franchise Your Business,”
visit ifranchisegroup.com/franchise-my-business/ or call us now at 708-957-2300.