If you’re like many Americans, you’ve likely thought about starting your own business. But if you’re one of the 10% of Americans who actually have started your own business or has begun the process of starting it, then you might be thinking down the road about franchising it someday.
Expansion through franchising has proven to be a success formula for many. While you might not be thinking about franchising your business just yet, if it’s an idea that you have toyed with for the future, then it’s never too early to start taking steps towards ensuring that your business is eventually franchisable.
In addition to having your business licensed and fully operating as a first step, there are numerous other factors that you can build into your business from day one to make it more readily franchisable. When the day comes that you do decide to franchise your business, you’ll be ready.
1. Feed a demand. The first step to a successful business is creating a product or service that consumers want to purchase or partake in. Your concept should be relevant in some way — whether fun, meaningful or even life-changing — for your customers. Beyond ensuring you’re feeding consumer demand, you want to build a brand that feeds your passions. Ultimately, it should be a brand that your targeted franchisee will be passionate about, too.
2. Establish your brand’s identity. First of all, in addition to making sure that the name of your business is catchy and memorable, you should also obtain a name that you can trademark on a federal level. It is far better to get it trademarked sooner than later, as you don’t want to start your franchise program only to find that you can’t use your own name.
3. Make it work without you. Sure, you expect to be involved in your business, but being at a business 24/7 is simply not possible, nor is it desirable. So, aside from wanting to take a vacation or retire at some point, a franchise strategy needs to accommodate a franchisee that will want to have a life of his or her own as well. This is why systems, standard operating procedures and manuals, and comprehensive training programs are mission critical to your success and business replicability.
4. Make it work in multiple markets. One-of-a-kind locations or concepts are hard to duplicate. For example, concepts that are highly dependent on the local environment can be difficult to replicate in other markets. Your restaurant located at the base of a ski resort, for example, might put up amazing numbers due to its location, but it might struggle in more open markets where you do not have customers literally being funneled down a hill to you.
5. Make it simple (for your target franchisee). Your business should be uncomplicated and easily teachable. But don’t worry, if your franchise concept is a bit more complex, you will just need to target a franchise prospect who has specific experience or expertise (for example, if you’re starting a medical franchise, you’ll need a doctor).
6. Concentrate on return on investment. Given the pride that many of us take in our businesses, we may be tempted to try to build an operation reminiscent of the Taj Mahal. But in franchising, the key is to “value engineer” the investment. The goal is to set up your systems in such a way that it drives repeat business and provides an ongoing revenue stream without investing in concept elements that do not enhance the brand or provide a measurable return. And as you build your business, be sure there is an adequate margin for the franchisee to make a good return, even after you have taken out your royalty.