Setting up a franchise system can be a very exciting time for any business owner if the process is conducted correctly. There are a number of key considerations we recommend that you think about before embarking on the franchising path. See our article on key considerations to be made before franchising.

What does franchising involve?

By franchising your business you are entering an entirely new business game that is vastly different from what you may have experienced in the past. Franchising comes with it its own unique challenges. While franchising can be rewarding for your business, you should manage your expectations early on. Reaping the benefits of a good franchising system may take months or even years – you need to be prepared for this. We believe that perseverance is the key to any business aspirations and this is especially true for franchising. Your franchisees are a valuable asset and you should always consider their ideas and suggestions to keep your franchise ahead of the game. As your franchisees will be working hands on in your franchised business and dealing with customers, they have valuable knowledge which could be of use to you. On point, is the story of the McDonald’s invention of the Filet-O-Fish Sandwich. A McDonald’s franchisee in a Catholic Community of the United States of America noticed sales plummeted during Lent due to the fasting practices of the community. This franchisee developed the Filet-O-Fish in response, which became an instant classic with McDonald’s franchises worldwide. A full recount of this story can be found at: There are also a number of expenditures which you should factor in as part of the support structure that is necessary to maintain and grow a franchise network. You need to consider whether your current business can support and sustain such expenditures. Some expenses to be considered include:

  • Human resources managers who you may need to manage the administration, operations and supply chain of your franchises.
  • Investing in new innovations that will make your business unique and appealing to customers
  • Conducting research for new products and services.
  • Engaging business performance managers who can analyse your business and determine methods to increase revenue and profits.

How do I know if my business is ready?

There are some general questions that you should be asking yourself about your business to determine whether it is ready to set up a franchise system. Some of these questions include:

  • What value does my business bring to customers?
  • Do I have the motivation to create and nurture a franchise system?
  • Is my business stable enough to operate a franchise system?
  • Is my business ready to cope with a broadening economy?
  • Is my business concept unique enough to be competitive in the market?
  • What market share can I expect to obtain?
  • Will franchising my business be able to increase future asset value?
  • Will franchisees be attracted to my business?
  • Are there any other ways that I can grow my business apart from franchising?


There are a number factors that you should consider and various questions you should ask yourself to determine whether franchising is the right option for your business. To a large extent, it is ultimately your decision as the business owner (along with any co-founders) to assess whether your business is ready to franchise. However, it is always a good idea to speak with a franchising lawyer or an accountant to get some extra information on the consequences of franchising and other important matters.

Ursula Hogben
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