What do you think of when you hear the word Franchise? Do you think of fast-food restaurants? Or hotel chains? How about nation-wide food markets, petrol stations and convenience stores?

before-you-franchiseYes, these are all examples of types of business that often use the franchise model, which goes something like this:

A type of business license that gives Franchisees access to, and right-of-use for, a Franchisor's intellectual property, proprietary knowledge, business model and business name. A start-up fee, annual licensing fees, and sometimes royalties are paid to the Franchisor by the Franchisee.

Why would a business want to franchise?

Let's discuss the benefits and the drawbacks now.

Pros and Cons to Consider Before you Franchise

There are a number of reasons a business owner may want to open more branches in other geographical areas, and here are just a few advantages to consider before you franchise:

  • broader geographical brand reach
  • expansion at a relatively low cost
  • increase in market share
  • greater ability to compete
  • an efficient way to capitalise on the brand name you've already created
  • access to talent in new locations
  • greater appeal to motivated, self-disciplined managers
  • new location openings with little investment

And, of course, there are some disadvantages:

  • limited control over operations
  • lack of motivation in areas that "corporate can take care of"
  • difficulty convincing franchisees to adopt new practices
  • lower profits than if you'd sell the same volume on your own
  • legal liability (albeit limited)
  • a more complex business plan

It's important to consider all advantages and disadvantages before you franchise, keeping your unique goals, mission, vision and values in mind. How well will you be able to communicate those values? Is your vision something that people have shown interest in? Will your mission appeal to like-minded owners and managers? Are your goals something you're excited about, and that you can bring others on-board with? And are you happy to give away some control, trusting that your product and its new representatives will embody your brand with great precision?

These are some questions you need to be honest with yourself about, before you franchise, because there's no doubt that franchising is a great commitment.

Now, let's get to that checklist.

A Checklist to Complete, Before you Franchise

It's a great idea to consider all possibilities before deciding to franchise your brand. It's certainly not the only way to build visibility, brand awareness, geographical territory, reputation and profits…however, it is a viable option if a number of conditions are in place.

Of course, always consult with legal counsel before you franchise, and consider all options before settling on the one that's right for your brand.

Here's a checklist to help you determine if you're ready to franchise:

  • I own all copyrights for my brand's name and visual identity.
  • My products are patented where appropriate.
  • My brand has a solid, proven business model and brand strategy.
  • My brand has processes in place wherever possible, to systemise tasks that are routinely repeated.
  • My brand's systems and processes are simple enough that brand representatives can teach them, with remote reinforcement and support.
  • I have proof of profit for my business.
  • I have accounts that I can make available to potential franchisees, to prove my track record.
  • Templates are in-place for things like marketing, consumer relations and customer service.
  • My current database, website and other digital platforms are easily expandable, to accommodate more users.
  • I have researched new geographical territories, and have a strategy for where franchise opportunities will be offered first.

Before you franchise, talk to other business owners, an attorney, an accountant, interested parties…everyone you can think of, knowing that even if franchising seems perfect for your brand, it's still a massive undertaking and should be approached with lots of preparation and planning.

Franchising is a business risk, for sure. However, it's only with risk that brands experience growth. Your task right now is to decide precisely which type of risk holds the most potential benefit for your brand. You can operate remotely, travel to deliver your product to new areas, hire employees to represent your brand, franchise…the possibilities are virtually endless in the exciting digital age we're living in.

I wish you the best in your quest to franchise your brand, and invite you to join the How to Build a Brand group, where others are answering the questions you have and supporting each other in even the most daring business adventures. Join us! There's professional branding, marketing and business support, live Brand Breakthroughs video sessions weekly, international experts imparting invaluable advice, and so much more.

About The Author



We're not around right now. But you can send us an email and we'll get back to you, asap.


©2021 How to Build a Brand Limited. All Rights Reserved. Developed by How To Build A Brand Limited.

Log in with your credentials

Forgot your details?