Should you Franchise your Business?

If you want to expand, but lack the money, the people and the time, it may be time to think about franchising. Trouble sleeping at night wondering who will knock off your operation first? Tired of reading about companies and thinking, “I have a better franchise concept than that company”?

You should franchise your business if you want to significantly expand it, which is if you want to grow your business to its optimum size and maximum profitability. Many great fortunes have been built on Franchising. This is done by franchising a business concept, growing it to a level where it fits the profile for an IPO and then take the company public. The market can value your company at a level much greater than the gross sales and profits of the company can justify.

In general, companies decide to begin franchising for one of three reasons: lack of money, people or time. The primary barrier to expansion that today’s entrepreneur faces is lack of capital. And franchising allows companies to expand without the risk of debt or the cost of equity. The second barrier to expansion is finding and retaining good managers which become franchisees. Finally, opening another location takes time. For companies with too little time, franchising is often the fastest way to grow. That’s because it’s the franchisee that performs most of these growth tasks. The franchisor provides the guidance, of course, but the franchisee does the legwork. Thus franchising not only allows the franchisor financial leverage, but it allows him to leverage his resources as well.

Is Your Business “Franchisable”?

Franchising is a relatively flexible format, and just about any type of business can be franchised, provided it meets some basic characteristics:

• It needs to be credible.
• It needs to be unique.
• It needs to be teachable.
• It needs to provide an adequate return.

If your business meets these criteria, then it may be a good candidate for franchising.

Negatives of Franchising

• Sales- sales driven in the beginning; this means you must have an effective franchise marketing program with very good sales people.
• Loss of Control- You have a polished system which guarantees success if adhered to.
• Managing Growth-Franchising, by its very nature is a very fast way to expand a business.
• Franchising your business on your own. Fatal because you require experienced professionals that can build a complete franchise offering.

The advantages of Franchising as a way to grow your Business

• Capital is always scarce in growing your business. Franchising is the classic case of using OPM, or other people’s money. Banks also readily finance franchises as it’s a proven concept.
• Trained, motivated management is part and parcel of franchising.
• Rapid Expansion.
• Achieve optimum size- maximum profits are realized by getting very large.
• Great buying power.
• Securing locations- Landlords like to have well known, successful Franchises in their shopping centres.
• Market Dominance.
• Collective development of advertising materials.
• Maximum income.
• Get super rich- Franchise companies are high profile, grow quickly, and have the potential to get very large.

Is assistance by professionals essential?

Generally, the answer must be a resounding” yes“. Seeking input from an expert in franchising will bring an extra perspective to the business to be franchised and help the prospective franchisor understand the intricacies of this step. It is essential to speak to an expert that offers the whole package, which includes branding, systems, documentation and contracts.

Brand Box offers the complete solution. We have designed a pain free process to evolve your business into a franchise business. We build you a brand with all the processes required to become a franchise. This will supply you with all the basic solutions that are time consuming if you do it yourself. Let our team of experts do it for you and make this experience enjoyable and exciting.

We call it the brand box soluion which supplies you with the complete solution and even manages your new franchisees from selection to the set up of new turn key operations.We also do financing and business coaching for the new franchisees. This ensures success. Call us now and we will empower you to expand and become a franchisor.

Companies wishing to franchise their business.

A thorough assessment of each applicant company is made before membership is granted by FASA. This would typically include a look at the viability of the concept as well as the presence of appropriate documentation, with the minimum requirements being:-

• has a disclosure document hat complies with FASA’s stringent specifications
• has a fair and reasonable franchise agreement that clearly reflects the spirit of FASA’s Code of Ethics and Business Practices
• has a comprehensive operations and procedures manual
• The franchised concept must have been in operation successfully for at least one year in South Africa. International franchised concepts that are members of their respective country of origination’s franchise association do not automatically qualify as members of the franchise association in SA.

We provide professional help and advice on all aspect of franchising to existing and potential Franchisors of all sizes and in all sectors.

Our services include the following:

• Administration - Providing ongoing support and compliance on behalf of the Franchisor
• Consultation - Our franchise specialist will provide you with a wide range of services and skills
• Sale of new and existing franchises - Franchisee recruitment
• Franchise development which include:
• Franchise fee structuring
  • Franchise territory analysis (franchise mapping)
  • Disclosure document
  • Prospectus document
  • Franchising business plans
  • Developing franchise agreements
  • Setting up pilot franchises
  • Franchisee training
  • Producing franchise operating manuals
  • Project management - Oversee the setup and development of franchise outlets
  • Site procurement - Identification and evaluation of new sites

Remember,franchise success is just a phone call away …