1. Are you credible?
Credibility is reflected in a number of ways such as: size, number of units,
years in operation, look, public awareness, profitability, strength of management, public
satisfaction, etc
2. Are you sufficiently different?
This comes in the form of quality and/or need of the product
or service, a reduced investment cost, a unique marketing strategy, target markets, a great
system, a unique name and/or brand, etc.
3.Can you teach your system to others?
Generally speaking if the business is so complex that it cannot be taught to a franchisee in 3 months, it may be difficult to franchise
4. Can your business concept be adapted from one location to another?
Issues such as state laws and regulations, consumer tastes or preferences, unique locations, or the talents of the person behind the concept should be considered. Another factor of adaptability is the anticipated size of your franchise system (over 50% of all franchised companies have 50 or fewer franchisees–you don’t have to have thousands or even hundreds of franchises, and don’t have to be national or even regional).
5. Is your system proven?
In other words, your system works, and while it may need to be refined, it is a successful prototype. This does not mean that you have to have more than one location. Many people think they have to open more outlets and prove them before they can franchise. This is not true.
6. Is your system documented?
While all successful businesses have systems, not all are
adequately documented.
7. Is your system affordable?
Affordability reflects a prospective franchisee’s ability to
purchase your franchise, and not just the actual cost of the franchise.
8. Will your franchisee receive a return on investment?
This is the real acid test of franchisability. A franchise must be profitable, but profitable after your royalties are paid. The income a franchisee earns can also be factored in. Profitability is always relative, and must be measured against other investments of comparable risk that compete for the dollar.
9. Are there market trends and conditions that will affect your franchise?
While not an indicator of franchisability, trends are a key to planning and timing. Will you miss out by waiting?
10. Do you have the capital to franchise?
While franchising is a low cost means of expanding a
business, it does cost. You will need the capital and resources to develop a franchise program.
11. Do you have a commitment to relationships?
Successful franchisers focus on building
relationships with their franchisees that are mutually rewarding. Strong relationships enable you to award franchises more readily and introduce needed changes into the system more easily.
12. Do you have the strength of management?
This is probably the single most important component. A single most common contributor to the failure of franchisers is understaffing and
lack of experience.
How did you do? Can you say that your business can be franchised? If yes, then you should ask
yourself the next question: Should I franchise my business? This question can only be answered after you understand what is involved in franchising your business, such as the legal
requirements, the operational requirements, the marketing and awarding of franchises and the
support of your franchisees.
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