Author: Christopher Conner / Source: Entrepreneur Many business owners have at one point or another considered the concept of franchise e
Many business owners have at one point or another considered the concept of franchise expansion as a way to build the business and expand into new markets through franchisees’ investment. Franchising is an exceptionally powerful expansion vehicle and has in many cases created national or global brands in very short time periods. Although effective, the model isn’t necessarily for every business or everyone, and the timing needs to be right for a brand to efficiently transition to the franchise model.
The market is asking for it.
My first recommendation is to let the market drive your timing decision. You can have all of the analysis, consultants and expensive data to review, but if people aren’t interested in the model and asking about the possibility of investing in the business as a franchise, it really means nothing.
Now, you aren’t really allowed to market a franchise before you have the disclosures and registrations in place, but that doesn’t mean you can’t get a litmus test of how much market there is for you to grow your future franchise and expand your brand through the franchise channel. Generally, it starts with what might seem like benign questions from customers, friends, vendors and people you already know. People saying things like, “Can you help me open a business like yours in Kansas City?” or “Can I invest in your business and be part of what you are doing here, I really like the brand” are indications that the franchise model should be in the realm of consideration.
These may seem like off the cuff questions that don’t mean a great deal, but they are in a very real sense potential franchise inquiries. Nothing is a better gauge as to whether you are ready to franchise then when the potential franchisees are already knocking on the door. After all, if you don’t franchise the business, these interested parties will either go elsewhere or just become your competition. You may have been in business for a short time period, but if the market is asking you to expand, you need to be considering the franchise channel.
You’re ready to grow your business but don’t know how.
The second indicator for when to consider franchising would be when you reach that crossroad in your business’s expansion — you know you would like to grow the company, but can’t decide what would be the…