You Have a Successful Business… Now what?
By Franchise Advisor - Helen Livesey
How exciting, you have spent the last few years working hard and now you have a successful and proven business model!
So, you may be asking yourself, what’s next?
If you don't want to just keep doing what you’re doing and see if the business grows organically but you do want to earn more and keep developing your company, there is another option - you could franchise.
But before you go down this route, there are a few things you should stop and consider…
- Do you have something that is different and that has an edge?
- Are you prepared to invest the time, the money (sometimes between £30 and £50k) into the transition of becoming a Franchisor?
- Do you have the structure and processes required?
- Are these processes replicable?
- Are you ready for your role to change?
Okay, if you feel happy with your answers to those considerations and want to explore further, let’s look at how to progress...
Step 1. Know your “Why”. You must have a reason for wanting to pursue the path of franchising. Is it because of your passion for the business and its ability to help others? Is it to create that incremental income that will help change your life and provide greater financial stability and freedoms? Whatever it is, it has to be solid and predetermined to ensure you are ready for the journey ahead and you always have in the back of your mind the reasons you are doing it.
Step 2. Speak to an experienced franchise consultant who can talk to you about the feasibility considerations required. Why? We hear you ask - franchising has many aspects to consider. Your “WHY” is your starting point - we are now moving on to the “How”. You must always ask the question, is it feasible? Is there a place in the market, do the numbers work out for you as a franchisor and for a prospective franchisee? It’s always best to have a feasibility study completed before taking any further steps, in order to ensure your business is at the right level and to check the franchise market for trends and success rates for the kind of sector you operate within.
Step 3. This next step is all about the “What” will then come out of your feasibility. When done properly, it will become your business blueprint and enable you to seek funding/investment and ensure a solid franchise foundation and MAP (Method, Ability and Process) to franchise. It will lay out your required journey, including the all-important financials. If you take anything away from this article, it would be this - please do not start your franchise journey without your own bespoke MAP.
Too often we see people embark on this journey, spending precious time and money without knowing first what they are basing their decisions around. For example, we have known business owners come to us with a prospectus, an outlined investment figure, royalties/marketing contributions, all these things already figured out but without having ever done a feasibility study, without ever having researched similar business models or worked out a set of financials to back it all up with.
But… knowing and understanding your numbers is a whole new article, so watch this space!
A 'basic' Franchise agreement shouldn’t be sourced, you want one bespoke to you and your business. You want protection as a franchisor and for your franchisees. What you start with is what you should continue with throughout your franchise journey as a general rule.
Hopefully, that is enough food for thought to help you if you are considering exploring the franchise sector. And whilst it is a wonderful option and works for so many businesses, it is not for every business. And this is why so much work needs to be put in beforehand to ensue you don’t see yourself going down the wrong path before it’s too late. If it isn’t right for your business, it isn't a bad thing for you or the franchise sector. Business success can come from many routes - a good consultant can talk to you about these other routes.
Our advice to you is… speak to a professional advisor from the earliest stage possible. It won't (or certainly shouldn't) cost you anything for an initial chat.