If you have reached a point where you are considering franchising your business, this is a positive sign that your business is steadily developing and expanding. However, there are many factors to consider before you begin the process of setting up a franchising system. If done the right way, a franchising system can greatly satisfy and benefit both parties. For this reason, we recommend careful consideration of a range of factors before commencing the franchising process.
What are the benefits of franchising my business?
It is true there that there are countless benefits to franchising your business if done correctly. Some of these benefits include that:
- your franchises can grow and strengthen your business as a network rapidly.
- You can give your brand name greater exposure, increasing the value of your intellectual property such as trademarks.
- the management of each franchise will be the responsibility of each franchisee which you may not have to directly monitor.
- your products and services can be distributed on a larger scale to a wider range of locations depending on where your franchises are situated.
- you can potentially earn profits without the involvement of high capital risk.
Is my business concept replicable yet sufficiently distinctive?
An important feature of successful franchises is that they all have a unique concept which makes them appealing to customers. However, popular franchises are also replicable, meaning that the business can fit into the culture and demographics of the locations where they are located. You should think about whether your business concept is flexible enough to still attract customers in various environments. You should also consider whether your business is distinctive enough from competitors to attract customers in a variety of locations.
Who are the franchisees?
Since the concept of franchising involves selecting franchisees who will effectively take control of their respective franchises, it is important to carefully select the potential franchisees. It is important that franchisees have the same business vision as you, are motivated and are people whom you can trust to carry on your business within their franchises.
You should also consider how you can train franchisees to conduct your business within the franchises to your standard and according to your values. Before you train a franchisee you must have an understanding of what your business stands for, how you want your business to operate and what lies in the future for your business. It may also be useful to put together a training manual or a workshop to effectively train franchisees.
Do I have enough information?
It is a great idea to have a thorough understanding of the marketplace to see whether this is the right time to franchise your business. You should also have an sound understanding of whether or not your business is in the best financial position to franchise. For this information you should seek advice from your financial adviser.
It would also be useful for you to speak with a franchise lawyer and get some legal advice about the implications of franchising your business and the variety of options that are available to you to expand your business. Getting legal assistance early on is very important so that you can prepare a well structured franchise system and a suite of legal documents that your business can rely on as it continues to expand. Often you can answer the question “can I franchise my business?” however a franchise lawyer would assist in answering the question of “how would I go about franchising my business?”
Setting up a franchising system can be a very exciting period for any business owner. There is huge potential with franchising provided your franchising system is set up correctly. If you have given some thought to the considerations outlined above and have received both legal and financial advice, then you are one step away from achieving your goal of franchising your business. To speak with a franchise solicitor, call LegalVision on 1300 544 755.
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