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Is Your Small Business Ready to Franchise? . . . A Checklist of Basic Considerations

Many owners of small to medium-sized businesses dream of turning their companies into franchises, and with good reason. Becoming a franchise could let your company expand rapidly into new regions, become a nationally recognized brand, increase your bottom line, and offer other meaningful returns.

But the reality is, not all companies are ready to transition and become franchises. Another reality is that a number of companies try to become franchises but fail in that attempt because they are not prepared.

With that said, what are some of the basic assets you should have in place before you try to franchise your business? Here is a checklist for you to review.

Do you have the following?

  • A proven business model – You should have a proven business model – preferably one that has been successful in multiple locations. If you do, you have a business model that can be replicated in different markets.
  • Strong profits and financial stability – If your company is not performing strongly, don’t expect a franchise structure to cure that problem. Your company should have a strong financial track record with positive cash flow and a healthy balance sheet. This will provide potential franchisees with confidence that they will succeed.
  • Brand recognition – A well differentiated brand is a big consideration. A strong brand is essential for a successful franchise system. Your company should have established brand recognition that can continue to expand.
  • A well-defined customer base – Do you know who your customers are and why they buy from you? If you don’t, you will have a difficult time supporting your franchises as they attract new customers and repeat business.
  • Excellent training – Work with a training development company and create excellent training programs before you start to sell franchises. When prospective franchise owners see that you will train them in all aspects of running your franchise, they will have greater confidence because they will see you are invested in their success.
  • Committed leadership and management teams – The company should have strong leaders who are committed to the success of the franchise system. These executives should have a clear vision for the future of the company and the franchise system.

And Remember, You Can’t Do It All!

Yes, you built your business, and nobody knows it as well as you do. But please be modest enough to accept the fact that you might not personally have all the knowledge that your new franchise will need to succeed. I would encourage you to bring in a franchise consultant – if not permanently, for at least long enough to get your new franchise off to a strong start. And build a top franchise management team that brings you all the legal, business, accounting, supply chain, marketing, and technology knowledge you need to be stronger than your competitors in the marketplace.

Getting the expertise you need can make your franchise a stunning success on the franchising landscape.

Evan Hackel, Entrepreneur, Author, Speaker, Podcaster

As author, speaker and Evan Hackel has been instrumental in launching more than 20 businesses and has managed a portfolio of brands with systemwide sales of more than $5 billion. He is the creator of Ingaged Leadership, is author of the book Ingaging Leadership Meets the Younger Generation and is a thought leader in the fields of leadership and success.

Evan is the CEO of Ingage Consulting, Delta Payment Systems, and an advisor to The Learning Network (formerly Tortal Training). Reach Evan at ehackel@ingage.net, 781-820 7609 or visit www.evanhackelspeaks.com

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