Sometimes the world seems already full of franchises. Early last year, a major brand of 24-hour fitness clubs announced the opening of a franchise in Antarctica.
But business history is full of turning points when it dawned on an entrepreneur that they could charge for allowing others to clone their business. Probably, if people hit on the right business idea, know the law and work hard, innovative franchises will probably continue to revolutionize commerce.
Is your business too weird or too normal?
These are not always the most critical issues. Whether your idea is too familiar might not matter, as recent huge successes in the burger and taco industries show.
Yours is also probably not the strangest idea around. Profitable or not, there are franchisees offering Christmas decorating, painted parking-lot lines, a place to smash things with baseball bats, cuddle-piles with strangers and, of course, cat-filled cafes. The Naked Cowboy even franchises playing guitars while wearing almost nothing in touristy locales.
Do you really want to change careers?
Whether the business could be franchised is one thing. But a lot goes into franchising a business for the first time. A great bagel baker might discover too late that they hate being a franchisor.
Not everyone is well suited to the hard, very specialized and capital-intensive job of being a franchisor. Before making the leap into the new role, consider talking to others who have succeeded and those who have failed. And think about how you can learn skills you will need by practice on your own current business.
Is your business profitable?
Launching the franchise phase of your business is capital intensive. The legal and accounting issues are not like getting a fishing license.
They are instead highly regulated and specific to you, your location, business and business plan. The law requires regular auditing, reporting and keeping up with changes and geographic variations in the laws. You will also want to consider hiring professionals in branding and advertising and other specialties.
Without a business that is already thriving and profitable, these costs may be prohibitive. Also, consider that attracting investors and quality franchisees takes a durable and profitable flagship business. Without it, you might want to wait while you bolster the core business.
Is your business scalable?
A franchise is not just a brand or a product line or a service or a way of interacting with customers, and so on. It is typically all of these and more.
A place to try out and settle on the strategies and skills and procedures needed to build out a franchise is in the original business. Your work life has probably not taught you how to turn your personal business into a machine that can reproduce. That is a special skill you can practice now when the risks are lower.
