Expanding your business through franchising is a decision that you have to be very sure about before you start accepting franchisees. As most franchisees use their life savings to start a business, opening your business for franchise is no laughing matter.
Entrepreneur.com.ph sought the help of experts and listed down six things that you should prepare before you can say that your business is already ripe for franchising.
1. Have your systems in place
This means all your operations, from production to distribution, must be fine-tuned and easily replicated. Marketing and brand support also fall under this category.
2. Define your market
Differentiation is a key ingredient of any successful enterprise, and a business concept must have a clear grasp of which market it serves to ensure long-term viability. Your brand’s competitiveness relies on its ability to stand out from a crowded market.
3. Develop an operations manual
To successfully replicate a business, have a set of standards and operating procedures (or SOPs). Putting them down on paper will ensure that all bases are covered, and all potential problems have a ready solution or resolution channel.
4. Conceptualize a training program
Training plays a crucial role in helping franchisees see how things are done in a franchise system. A uniform, comprehensive training program is a must.
5. Set up financial controls
A sound financial system is the lifeblood of any enterprise, so pay extra attention to this aspect of the business. A firm finance system incorporating best practices will help you and your franchisees monitor the health and long-term viability of the business, and weed out irregularities.
6. Ensure prompt and on-time distribution
Reliability and ease of service are two pillars any business should have, especially if you plan to spread your concept to a wider marketplace. Establish a cohesive and well-structured logistics and distribution scheme.
People who say that franchising is a way to earn easy money are misinformed, because it takes a ton of hard work and dedication to make it work. The franchising route is a rewarding option for those who have the smarts, passion, and—most of all—drive to succeed.
So, are you ready for a franchise?
This article was originally published in the May 2010 issue of Entrepreneur Philippines.