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.