Turning your business into a successful franchise concept requires a lot of hard work. These are the questions to consider before breaking into the industry.
When entrepreneurs build a successful business, it’s a natural next step for them to want to expand. But growing a concept outside of their initial location is easier said than done—business owners are often met with multiple challenges as they try to expand their reach. That’s why entrepreneurs consistently turn to the franchising industry for help.
By franchising their businesses, entrepreneurs have the opportunity to create a proven system that can be replicated by other local owners in a variety of different markets. With franchisees working to develop a presence in their own individual neighborhoods, franchisors are then able to focus on bigger picture development efforts that will ultimately get their brand name in front of more potential customers. However, not all businesses are compatible with the franchising business model right off the bat.
It’s critical for entrepreneurs to take the time to determine whether or not their businesses are ready to expand with the help of franchisees before they make the leap to become a franchise brand. And according to SMB Franchise Advisors, one of the industry’s leading resources that helps brands successfully launch their franchise opportunities, these are the questions that entrepreneurs can ask in order to decide if it’s the right time to break into the industry.
1. Is your brand’s concept fully rounded out?
Creating a brand with solid growth potential and strong awareness goes beyond a having a logo and an idea. Franchise concepts are only successful when they can be replicated—local owners need to be able to adopt a system that has been thoroughly vetted by corporate owners and proven to lead to positive results. That means that entrepreneurs-turned-franchisors need to be willing to adjust their model to work within franchising’s framework.
“One piece of advice that I was told while breaking into the franchising industry was that I’m no longer in the photography business, I’m in the franchising business. My primary role as a franchisor is now to build this brand and help it grow, which means taking on an entirely new set of responsibilities,” said Laura Novak Meyer, the founder of Little Nest Portraits. “My role now is very different from the customer-facing work that I used to do on a daily basis. But it’s ultimately what’s allowing my concept to grow far beyond my expectations.”
2. Have you simplified your business model?
Because franchisees are taking on an already established business plan, they need to be able to dive into operations without the knowledge that a brand’s founder has. While founders may be able to make decisions based on intuition and their own familiarity with the brand that they created, local owners are seeing things from a different perspective. That means that brands need to clearly lay out their operations and best practices before opening up the door for other aspiring business owners to take the reins.
“In order to be effective as a franchisor, brands need to have a step by step guide that clearly explains what needs to be done in order to be successful. That’s ultimately the value of joining a franchise system—local owners don’t have to start their own concept from scratch,” said Steve Beagelman, president and CEO of SMB Franchise Advisors.
3. Are you working with the right team?
Franchise concepts are only as strong as the people behind them. From consultants and corporate team members to franchisees and their employees, it’s essential for brands to build a network of likeminded individuals who all share the same passion and drive for success. By expanding with the help of the right people, brands are setting their concepts up for continued growth in the long run.
“I think that when it comes to adopting a business model, you can either choose to be a cookie cutter franchise or work with the right people. We decided to go with the second option at Little Nest Portraits, and it’s worked out incredibly well for our system,” said Meyer. “Being selective in recruiting franchisees has played a crucial role in our success. Our system works best when entrepreneurs have the flexibility to tailor our model to their local community, so we know that we only want to bring in owners who have that passion and drive.”
4. Will the financial numbers work out well for your franchisees?
At the end of the day, finding the right people to partner with comes down to whether or not it will be a successful venture for them. And their paycheck ultimately plays a major role in that. Before launching a franchise, brands need to ensure that their sales and profits are something that can be achieved in other communities as other local owners get their businesses off the ground. While franchising comes with an investment, brands need to be confident that the payoff will be well worth it in the end.
“There’s no doubt that money is a motivating factor in franchising. Your concept won’t last as a franchise if there isn’t a way to make it sustainable for franchisees,” Beagelman said. “But by working with a consultant and additional financial advisors, it’s possible to help set your local owners up for financial success.”
5. Are you prepared to become a supportive franchisor?
After you’ve checked off every box on this list and have created a Franchise Disclosure Document, or FDD, there’s still one thing that separates successful franchisors from the rest: support. As franchisees sign on to develop a brand, they’re going to rely on a corporate team to help get their businesses up and running. That means franchisors are responsible for guiding their owners through the grand opening process, especially as they’re first launching their business opportunity. And according to Jason Mazzarone, founder and CEO of Long Island Super Bowls, providing that support comes down to an unwavering belief in your brand.
“Being successful as a franchisor comes down to three P’s: patience, persistence and passion. Expanding your business with the help of local owners isn’t going to happen overnight, so you need to be willing to put in the time and effort to make it happen,” said Mazzarone. “You need to firmly believe in your concept and its potential to take off in order to convince both consumers and business owners that they want to be a part of your brand.”