Following on from the last blog post, there are yet more criteria that must be met to ensure that you can franchise your business.
- Differentiation – In addition to all the criteria in the first blog in this series, like any business you must be different enough to be recognisable and to stand out from the crowd. This can be achieved in several ways and is normally in the form of differentiated product or service, different target market or a unique marketing strategy.
- Adaptability – is your product adaptable? – Measure how your concept can be adapted from one market to another. Some concepts (e.g., pool cleaning service) do not adapt well over large geographic areas (this franchise would obviously not be viable in cold areas) because of regional variations in local conditions and consumer tastes or preferences. Others (e.g., medical practices) are constrained by varying laws. Some franchises work well because of the unique talents or abilities of the individual behind the concept.
- Documented Systems – All successful businesses have systems. Part of being franchisable involves having well documented systems such as manuals and legal systems. See more information about this here. In order to be franchisable, these systems must be documented in a way and format that communicates them effectively to franchisees and their employees. You, as the franchisor, will need to document your procedures, systems, policies, business practices and forms in a comprehensive set of user-friendly operations, branding and human resource manuals.
- Return on Investment – This is the real test of franchisability. Prospective franchisees will make a strong judgement based on the expected return. Your franchise must be profitable, both for your franchisee and you. The franchisee needs to be able to pay you royalties.
Just when you thought you had all this covered there are 3 more factors that need to be included in the criteria. These will be covered in our next blog post.
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