A. If you've got a business model that is successful, franchising is a fast way to grow the business. Through your franchisee locations, you will be able to gain access to broader territories and a much larger customer base. Since your franchisees are paying to buy the franchise location, your business can expand at a much lower cost and risk to you, and through the growth of your network you can take advantage of increased buying power for goods, suppliers and advertising. In addition, franchisees are directly responsible for operating and managing the location, taking that off your shoulders and allowing you time for innovation, marketing and network development.
A. As with all business ventures, franchising has its pitfalls as well. For one thing, you lose a measure of control over how stores are managed. Your franchisees are not your employees. They are independent business owners whose main goal is to make their business profitable. Since they have to pay you a percentage of each sale under the terms of the franchise agreement, that may eat into profits and can cause conflict between you and your franchisees. And the initial costs to franchise the business may be higher than you expected.
A. You really need to understand the reasons why your business has succeeded. Write everything down and then review your notes with a franchise consultant to determine whether or not franchising will work for your business model. It's important to determine the costs of franchising the system and to put together a viable growth plan, and a franchise consultant can help you do that.
Franchising isn't for every business, or for every business owner, but if you've got the ambition, the energy and the willingness to see it through, you may be a good candidate to become a franchisor.