Can any organization turn into a franchise? Not exactly. Find out which qualities make a good franchising project.
There are plenty of new business owners who would say that they are producing a pretty huge volume and that they’ll be making profits soon. But this is not enough. For your business to be valuable and attractive to franchisor and franchisees, your business should be able to generate enough profits that will provide about 15 percent return on their investment plus a good salary for the manager or owner. There should be enough profits to pay off royalty to the franchisor and one percent for advertising and marketing.
A lot of business owners rhapsodize on their services or products, and great services can really help a franchise. But they are not likely to make this franchise. A franchise needs systematic delivery of products cost effectively and smoothly. Take one step back and try to objectively look at how your company works. Do you have a system for finances? Are the advertisements working? Do you have any unprofitable items?
You need to make sure that you stand out from the crowd. Your business doesn’t have to be the only salon in town. To be a franchiseable business, you need to have a feature that captures the attention of the people. If people see that you have something special in your business, then its prospects for franchising are enhanced.
The most successful franchising businesses aren’t really that complicated. You should be able to sit down with your franchisee and teach him or her everything they need to know about the business. Don’t expect these people to have PhDs. If your organization has excess baggage that are not crucial in the bottom line, then might as well get rid of them now.