Livin' The Dream

Franchise Your Business

Why do companies create franchise systems?

Most commonly, the Company wishes to expand rapidly, but does not have the financial resources to fund the growth.

• The Company may be seeking to convert existing company owned locations into franchises in order to generate needed capital.

• The Company's founder wants to respond to inquiries made by customers, employees and others asking if opportunities would be available to open a retail site offering the same products and services.

• The Company may want to have a high degree of control over how products and services are presented, but they do not have the required financial resources to open company owned outlets.

• The Company may be launching a new line of complimentary products or services, and it may prefer to distance them from its core business.

• The Company's founders want to create or expand name brand recognition throughout an identified market and feel so strongly in themselves and their products and services that they are prepared to share future success with franchisees.

Is YOUR Company Franchisable?

Every company is different. Therefore, there is no reason to believe that the 'ideal' or 'correct' way for all businesses to expand and grow is by creating franchise systems. So before choosing to create a franchise system a company should consider the following:

• If the Company is so unusual, unique, or so totally different or complicated that it cannot be easily duplicated, then the company is not a candidate for franchising. If the 'average' person cannot learn how to run the business, there is no need to consider negotiating the rights for someone to try.

• The Company's products and services must have broad appeal. As an example, certain ethnic foods may be a basic staple in one community but may not be accepted outside this limited market.

• The Company must offer products and services that will have lasting appeal. New and 'trendy' concepts that are designed to offer only short-term appeal should be promoted by other methods of distribution.

Other Considerations

There are several other important factors that you should consider before deciding to proceed in establishing a franchise system. If your Company has or can provide positive answers to most of the following questions, the probability of success increases dramatically.

• Has your Company been in operation long enough to project the chances of future success for franchisees?

• Are you eager to expand and is your Company capable of providing initial and ongoing support to franchisees?

• Is the business simple enough that most people can learn how to operate it easily and effectively?

• Can the business be analyzed and fully documented for others to follow by using operation and procedure manuals?

• Do the products and services being offered fill a defined consumer need? Are they acceptable for a large segment of the market?

• Can the business concept be packaged and effectively communicated and sold to prospective franchisees?

• Are there registered trademarks, trade names, and patents that have been adequately protected that can be licensed as part of the intellectual property to prospective franchisees?

• Does your Company have qualified managerial staff available to assume the responsibility of overseeing a franchise operation? If not, are you prepared to invest the financial resources necessary to recruit qualified managers?

• Will the franchised business generate sufficient revenue and profits to attract the "ideal" franchisee candidates?

• Will the initial investment requirements be commensurate with the projected returns and is it realistic to project that "ideal" franchisee candidates will have the required funds or have access to borrowings?

• Is the Company prepared to make the financial and time commitment that franchising a business requires?

• Is the Company prepared to enter into long term agreements with individuals resulting in business relationships that will last for many years?

If you want to discuss the prospects of franchising your business further, please contact Leo Wisniewski.