There are many factors to take into consideration before a business owner expands into a franchise. Financial, legal and administrative matters must be taken into consideration to make sure that the person is equipped to handle the challenge of starting a new kind of business that operates on a different model. Before any of those other concerns can be addressed, however, business owners need to first decide if their company is even equipped to become a franchise.
How to tell a business could be a franchise
According to Entrepreneur, to determine if a business has the staying power to become a successful franchise it needs to be marketable and cloneable. When determining if a business is marketable enough to gain investors, it needs to have a unique angle or draw that makes it stand out from competitors. What would customers get from this establishment that they can't get anywhere else? Before pursing a franchise opportunity, a business owner needs to determine what his unique marketable factor is.
To determine if a business is cloneable or not, the owner needs to establish what it would take for another person to replicate its operations. Ideally, a cloneable business should take less than three months for an average person to learn to operate. All the details of running the business need to be well-documented and easy to understand so that people can buy and run their own part of the franchise.
Conducting franchising analysis
To find out if a business meets the qualifications for starting as a franchise, the Houston Chronicle recommends business owners conduct a thorough business analysis to determine if they are making enough of a profit to justify the expansion.
If it is, the next steps would be to draw up the operations guidelines and a marketing plan. Having these manuals prepared will help show investors that the business has the potential to grow as a successful franchise.
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