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Franchise a business

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Our executive team are experts in franchise development, franchise marketing, and small business. As such, our writings and articles about how to franchise a business or how to run a run a successful franchise development team are often published in leading industry magazines as well as other online knowledge bases. Some of those, such as Why Become a Franchisee, can be reproduced in full. Others are basically works-for-hire, and cannot be reproduced here in full, but our readers may find them of interest, so we decided to provide one page, with a synopsis of each article and a link. All of the articles linked on this page were written for Demand Studios.

Five things to consider before franchising your business

Are you wondering how to franchise a business? Are you wondering if franchising your business is the right decision for you? Then here are five things you should consider!
1> Do you have a proven concept?
You are asking people to invest in your concept, so you better have proven it. If you have an “idea” you want to franchise, go prove it first. Do the business that you want to franchise, for at least a year, before you try to franchise it.
2>  Can your business model sustain a royalty?
Some businesses operate on low margins, and that’s ok! If you have a business that does $500K in revenue a year, and you bring 10% ($50,000) to the bottom line, and it doesn’t take up all your time, then a lot of people consider that a good business. However, if you were to franchise it, a franchisee doing the exact same numbers, but having to pay a 5% royalty back to corporate, would only be making 5%, or $25,000, to the bottom line. That’s not nearly as attractive.
3> Is your business scaleable?
Even if you have a proven, high margin concept, you still might not want to franchise. If there is something unique about you or it, it is still not fit for franchising. If you have a successful surf shop, which requires proximity to the ocean to succeed, you might be better served opening a couple of corporate stores. The same would apply to a ski and snowboard store, a boat cleaning business, or any other business that relies on proximity to the ocean, snow, desert, etc.  Additionally, if it took you years to master your craft, or if you feel like you got lucky that your […]

Outsourcing Franchise Development

 

Part of knowing how to franchise a business is knowing how you are going to sell your franchise. The concept of outsourcing the franchise development function of a franchisor’s business is nothing new.  Historically many startup concepts, which often lack the necessary capital and infrastructure required to generate unit growth, reached out to franchise consultants to provide a professional level of franchise sales services.  Today, franchisors of all sizes often look outside to handle some or all aspects of their franchise sales process.  This has proven to be an attractive alternative because it frees up a franchisor’s time and resources to focus on the success of their franchisees.

 

Why Franchisors are Outsourcing Their Sales

To understand why outsourcing has become such a popular option, franchisors need only look internally at their current sales efforts.   Answer these questions, honestly and objectively:

Is your sales team effective at generating sales? Have they historically met goals and forecasts?
Internally, who will manage the franchise sales consultants?
Do you understand the current cost associated with the sales department? (Salaries, overtime, bonuses, office expense, travel and entertainment etc.)
Do you understand the complete costs of a franchise consultant? (Commissions, management fees, software fees, minimum add spends)

 

 

Recruiting a Franchise Sales Professional

Over the last seven years the number of franchisors entering the market has more than doubled.  This has created a buyer’s market for quality franchise development personnel.  Startup franchisors often find it difficult to compete for the few seasoned franchise executives available in the market place.

The challenge to attract the right person is twofold;

Expense:  The cost associated with recruiting and potentially relocating a sales executive can be significant – even one with modest franchise experience can easily command a six-figure […]

Validation, the key to successful franchisee recruitment

Franchisee Recruitment
Validation is something you should be thinking about even if you are just now considering how to franchise a business. You might think that you are responsible for selling your franchise, or that you employ the people responsible for selling your franchise, but that is simply not true. The people that impact your franchisee recruitment the most are not your salespeople, they are your existing franchisees.  They are your salespeople.  If they are happy, you will sell franchises, and if they aren’t, you won’t.

Sure, there will always be one or two people out there who you can “talk into” buying a franchise, because the concept you have happens to be what they have dreamed about their whole life, but most people make their investment decision based largely on what they hear from the franchise network.

Validation is even more important to a start-up franchise than it is to a mature franchise. When you have 100-200 locations or more open, and 2-3 franchisees that are unhappy, the impact is not nearly as damaging as if you only had 5-10 franchises open with 2-3 that were not happy with the system.  Furthermore, a start-up typically will not have any name recognition to lend it credibility; the only credibility is what comes from the franchise network.

Of course, most franchisors know that validation is important; they just don’t know what to do about it or even if they have great or poor validation. There are a few key steps a franchisor can take, however, to measure validation, find out what is helping and hindering it, and quickly improve their system-wide validation with minimal investment.

Please note that there is one killer for validation that we cannot help; an unprofitable […]

Why Franchising Your Business Makes Sense

Why Franchising your business makes sense
Franchising is a unique method of growing your business; it truly is a merger of large-organization efficiency with small-business, entrepreneur spirit and motivation. Of course we talked a lot about the fact that not every business should franchise, but if yours is right for franchising you will experience an awesome wealth-producing machine. So lets talk about why franchising your business makes sense, and the benefits of franchising.

the benefits of franchising your business
If you are wondering what the benefits of franchising your business are, here are just a few:

Less Capital Requirements
Fuel the growth of your business through the capital invested by each individual franchisee.
Add Additional Revenue Streams to Your Business
Franchise Fees
Royalty Fees
Advertising and Marketing Fees
Sales of Company Branded Products
Sales of Supplies
Training Fees
Sales of Promotional Products
The Ability to Expand Rapidly
Opening multiple locations at the same time allows you to obtain a large footprint quickly while putting your company a step ahead of the competition.
Gain Quality Management in Additional Units and Maximize Unit Revenue
Having an owner running the business usually insures that there will be a level of service and dedication that typically can’t be found in an employee. Franchisees have a vested interest in the success of their business and with their investment at risk, franchisees should be much more motivated than an employee.
Larger Advertising and Marketing Budget
Many franchisors institute a national advertising fund. This requires the franchisees to contribute a percentage of their gross sales to a fund used to increase advertising, name recognition, and the overall value of the business.
Branding
Opening units throughout the country will increase Brand awareness adding value to […]