Should I Franchise My Business?

If you are considering franchising a business, then if nothing else, remember this: new franchisors succeed or fail based on the level of expertise and foresight they have available to avoid the inevitable pitfalls. And those pitfalls are real, they are treacherous, and they are nearly unnoticeable as one begins the arduous path of franchising a business.

While it is true that any business CAN be franchised, it is NOT true that any given business SHOULD be franchised.

Although they are critical to successfully negotiating the critical stages of starting a franchise, franchise expertise and foresight are not among the new franchisor's skills. Of course, when questioning the feasibility stage of development, most fledgling franchisors have the good sense to hire professional resources such as a competent franchise consultant or a franchise attorney, but it is in the management stage where new franchisors too often attempt to go it alone. That's a mistake. Going it alone into the dark waters of franchising is often akin to signing ones own death warrant. It is simply a tricky industry that may look easy from the outside, but it is extremely complex, and that fact becomes evident when franchising activities begin.

No matter what other functions may appear obvious, know that franchisors have two primary functions: keep their concept up to date, and adequately train and support quality franchisees. Unfortunately, they cannot accomplish these tasks if they do not understand and have the skills for developing programs to make them happen. Well-designed plans, training and support programs as well as attracting quality franchisees only result from properly shaping the franchise offering from the beginning and then moving it forward. To accomplish this task is essential to enlist the help of quality franchise mentorship.

If you are thinking of franchising a business, then the following steps are important to your planning
Step 1. Deciding to Franchise requires an objective analysis of the business. Commonly referred to as a "feasibility study", this phase is often given little more than a quick look because negative findings would impact upon two critical parties:

First, the prospective franchisor usually does not really want to know that franchising might be a bad idea because that would stand in the way of becoming a franchisor. Does that sound strange or foolish to you? Perhaps so, but it is extremely common.

Second, most franchise consultants, those who earn a living establishing franchises, will not want to turn away a fee for creating a franchise. Again, if that does not sound likely, then think again. Franchising has as many wolves as any other business. Be careful about who you talk to about your goals. Or more simply put, check the references.


Step 2. Establishing the franchise certainly requires experienced (trustworthy) help, but many emerging franchisors unfortunately want to believe that franchising is a "do-it-your-self" project. IT ISN'T. The road to successful franchising is littered with failed entrepreneurs too inexperienced to understand what they are attempting.

An experienced franchise attorney is required to prepare legally correct paperwork, but that paperwork can be filled with strategic errors, and that is the franchisor's responsibility to avoid, not the franchise attorney's. How is this problem overcome? It is overcome by engaging the services of a consultant (or very successful franchisor) who has made it safely through the process and is now in a position to help guide you.

Franchising is a highly complex and competitive industry in which special skills are essential for winning. Past success in business has little to do with the demands of franchising. Ultimately, the new franchisor will come to recognize that two businesses are being straddled - the core business being franchised and the business of running a franchise company.

Starting a franchise presents tremendous opportunities for personal and professional growth. When handled correctly the role of franchisor can be as exciting and rewarding as any business venture conceived. Obviously many have done well financially as franchisors, and that is important, but helping emerging entrepreneurs find their own freedom in business should be equally rewarding. Mentorship is the name of the game. It should flow into the franchisor in the form of quality franchise consulting and out to franchisees. For my money, franchising is the best game in town. Just learn how to play before you jump in.

Find a great mentor, listen, make good decisions at each stage, and bend to the light. Franchisors then become great mentors themselves. Is that such a novel concept? No, it's the truth about franchising and it's a fundamental truth of life in general. Good luck.

About the Author
Nick Bibby is Principal of the Bibby Group. Nick is a court accepted franchise expert witness, consultant to those seeking to franchise a business, and counselor to prospective entrepreneurs. With over 20 years of experience analyzing and solving franchise problems Nick has dealt with strategic planning, marketing, operations, training, support, organizational design, management selection, and franchise relationships.