Important Criteria to Consider Before Franchising a Business

In an article published on Entrepreneur.com, iFranchise Group senior consultant Emiliano Jöcker counsels business owners who are contemplating franchising their businesses with some of the key factors to consider.

Jöcker acknowledges that many growth-focused business owners have likely created a brand that can be duplicated and that is ready to be franchised. What they may not realize, however, is that the transition from business owner to franchisor has its own unique challenges, beyond that of simply replicating the business model.

The criteria that indicate whether or not a business might be ready for franchising include:

• Having at least one, but ideally multiple prototype businesses in operation
• Ensuring that the brand or concept is sufficiently differentiated in the marketplace
• Being confident that the concept can be effectively implemented across different markets
• Working on having well-documented operational procedures and standards, as well as effective technology tools for business management
• Taking the steps to have a fully-developed, trademark-protected brand package (logos, decor, etc.)
• Doing the necessary financial analysis to ensure that the franchise opportunity is properly positioned and that it provides the necessary ROI for both franchisor and franchisees

Other important factors to consider when franchising a business include whether the business owner will make a good franchisor, which can be validated by:

• Respecting the entrepreneurial drive of potential franchise owners
• Understanding the need to build long-term, mutually beneficial franchisor-franchisee relationships
• Building an internal team that can effectively support franchisees

Jöcker’s final input on the topic is that becoming a franchisor is a big step, one that requires setting the right expectations, building collaborative relationships, and assembling a team of experts, all while presenting an outstanding brand. But, when done right, particularly with the help of franchise-experienced business development, financial, and legal experts along the way, franchising can be an ideal way for business owners to join forces with other entrepreneurs, to grow a concept and introduce a brand to markets that otherwise might have been out of reach.