Who should Franchise?The Franchise Question

Many feasibility studies look at a business for franchise-suitability. They evaluate scalability, ROI, product line availability, etc. One thing they miss, however, is the business owner. They fail to ask the question “who should franchise their business?”

Should you franchise?

Are you the right person to franchise? The first thing that you have to realize is you are making a major career change. Becoming a franchisor means you will completely switch your focus from running your current business to running a franchise. If your franchise venture is successful, you will likely have to bring in other people to run the company-owned units of your business, or even sell some or all of them off to franchisees.

Do you have what it takes to be a franchisor? Do you even want to be one? During one phase in my career, I ran the day-to-day operations of a franchise organization in the video game space with 200+ franchisees. Though I was in the video game industry, my day-to-day usually had nothing to do with gaming. I spent my time responding to franchisees needs and concerns and proactively monitoring the system so I could foresee problems; I had solutions in place before the franchisees even knew they existed. Studying spreadsheets, monitoring key metrics, and facilitating business training were all part of my job, but never once did my job require me to pick up an Xbox® controller! Are you ready to switch careers AGAIN? Make sure you have through this through before you franchise!
Assuming you have the desire to become a franchisor, you must then evaluate your capital situation. Franchising is an expensive endeavor. I have seen several franchisors with a promising model come into franchising with a shoestring budget, and never even get to their first franchisee. Regardless of how “hot” your business is, without the right budget, you will likely not get traction in this business. Yes, there are some exceptions to the rule. You may have heard of someone coming into franchising with $10,000 or $20,000 in capital outlay only to become an amazing success story. I promise you, these exceptions only prove the rule, and for every one of them there are literally tens if not hundreds of “franchisors” that came into the business underfunded and were never able to even reach the one franchised unit mark.

What are your thoughts? What does it take to go from successful business owner to successful franchisor?


To learn more about who should franchise their business and other key topics in franchising, check out How and Why to Franchise Your Business on Amazon.