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Before Franchising your Business Answer These Questions
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In the old Tarzan movies the bad guys were always searching for the elephant burial ground and its treasure of ivory tusks. In franchising there is a franchise burial ground, only instead of ivory tusks it contains lots of franchise programs that never made it. The causes are numerous, including a flawed franchise concept, poor management and a lack of capital.  If you're considering implementing a franchise program built upon an existing business there are certain questions that need to be answered.

When you answer these questions be objective, honest and seek input from trusted advisors.


·         Does the business have a certain uniqueness whereby it's different in terms of products, services, markets, and investment level?

·         Is there sufficient capital necessary to launch and develop a new franchise program?

·         Is it a business that a franchisee can learn how to operate in a short period of time?

·         Can the franchise concept work well and adapt to numerous locations and markets? There should be a strong demand for the products and services.

·         Are the skills to operate the business complex and/or take a significant period of time to learn to operate?

·         Will a strong management team represent the franchisor? It will take more than one-two people to lead a franchise operation and run the existing business.

·         Are there unique market characteristics, which are not easily found? Does the location for the business have special requirements?

·         Is it a business type, which relies on repeat customers and a special service? As an example, professional services like legal and accounting are .

·         Does the business have very complex and detailed audit requirements?

·         Can the business be set into key processes or steps?

·         Is there an outline or manual, which documents business operations?

·         Is the business profitable with positive sales trends? Will the income statement support a royalty add-on?



Before deciding to proceed with a franchise model it's important to make a critical assessment of the existing business.





Posted on January 4, 2012 at 10:28 AM
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