Should Your Business Consider a Franchise Model?

The Franchise Consulting Company • June 2, 2022

Some key points to consider when thinking about franchising your business.

At Franchise Consulting Company, we work with people who are interested in pursuing business ownership with a franchise, and we work with businesses that are looking to expand through franchising. With more than 3,000 registered franchises in the marketplace, it is important to know what makes a quality franchise organization and what an ideal partnership between franchisor and franchisee entails.

The International Franchise Association offers a resource on Elements of Successful Franchising. In addition, here is an overview of the areas we look for when we pre-screen what makes a good franchise ownership opportunity.

An evaluation of the franchise prototype

Your prototype is the concept for the business and is based on well-established consumer demand. This includes the key infrastructure such as location, design and signage, revenue streams, a solid plan for business operations and marketing to ensure customer growth. When compared to your competition, you can set yourself apart with a way of doing business that is not easily duplicated. This might include proprietary elements, technology or a different style of operation. There will be some duplication with the competition, but to attract a future business owner, you have to offer something unique.

Some key things to consider when developing your prototype:

  • Red tape. What are the regulations or licenses required to operate and can you present a way to help franchisees meet those obligations in an easier way?

  • Trademarks. Are specific proprietary elements (ie: recipes, formulas, logo) of your business trademarked?

  • Ease of duplication. Is your prototype easily duplicated so someone who is new to the concept could learn it and implement it with the appropriate training?

The franchise business system

Every franchise has a format for business operations that contains details such as price points for different products or services, supply chain commitments, the technology required to operate, human resource assistance, marketing structure and scalability (growth opportunities). The research that goes into your business system will likely include the following:

  • Supplier commitments. Your chosen suppliers must be capable of supplying products and services to potentially hundreds of locations.

  • Location transferability. Consistency is a key to building a successful franchise brand. Your business operation has to work in any state (or country) where you choose to offer franchises.

  • Training. A future business owner, regardless of their previous experience, will be trained to run the franchise. Your training needs to anticipate a diverse base of people who will not come to the business in the same way. Training has to be easy to understand, cover all elements that are necessary to run the business and leave room for any individual needs that a future franchisee may encounter.

If you offer different levels of franchising (ie: kiosks, small locations and larger, full-service locations), you need a business operations package for each one. Keep as many similar elements as possible and provide an easy process to scale up for franchisees interested in opening additional locations.

What will you offer for ongoing support?

Once a franchisee is up and running, your role transitions into providing ongoing support. This may include technology improvements, keeping the brand fresh, customer development strategies and offering networking opportunities to keep franchisees engaged and motivated in their business.

For future business owners who join the franchise without industry-specific knowledge or experience, the ongoing support is an important consideration. This helps build confidence in being successful with your franchise model, and that the business fits the lifestyle they are seeking as a business owner.

The financial commitment

What will your financial plan look like for future franchisees? How will you justify the franchise fee and ongoing royalties?

Every franchise will create a franchise disclosure document which explains the rights and responsibilities of both parties as well as the financial requirements. Legal, financial and other advisors who are experienced in franchising can assist with this, but the decision on pricing your franchise will be yours to make. Your fees need to reflect the uniqueness of the business and what you are capable of providing to a future franchisee. You also need to address multi-unit pricing.

In working with future franchisees, we help them evaluate if the franchise they are interested in joining is financially secure and operationally non-deficient. The goal is to provide a franchise model with proven healthy profits and smart, ongoing reinvestment into the brand and operational improvements.

Talk to franchising experts

As a company that deals with both businesses looking to expand through franchise and future business owners looking to become franchisees, Franchise Consulting Company is in a unique position to assist with your possible business expansion through franchising.

Franchise your business with our help to ensure you produce a franchise model that meets your wealth-building goals and attracts future franchisees.


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