Go it alone or franchise?Lets start with the first question. Franchising is a great way to start your own business as it minimises many of the problems that rear their ugly head in the first years of being your own boss. For example, when you open a successful franchise you know that you have a tried and tested business model, so many of the initial teething problems of establishing a business can be avoided. Plus, by opening a franchise you can get started much more quickly, as you do not need to develop all the content, written materials and intellectual property from scratch. There is also a support network you call upon fellow franchisees and ask them questions and then apply the learning’s from their own mistakes, which saves you from making them yourself. it’s an intelligent and considered way to start a company. I very often hear sad stories from people that jacked in their PAYE jobs because they had (what they thought was) a stellar idea for a new product or service. However, they quickly realized that the path to take a concept to a fully-fledged successful business was a very rocky one. Having an idea is just one part of a very complex puzzle. Business growth is dependent on having the right skills, structure, strategy and staff. Knowledge of these four things is not innate and business founders often lack experience across some or all of these pillars. With a successful franchise model the experience and support comes as part of the package, which massively enhances the opportunity to succeed.
Growing through franchisingLets move onto the second franchising question I hear a lot whether a company can or should franchise their business model. As a fan of franchising I certainly think that it can work extremely well, but this must be heavily caveated. Firstly, the would-be master-franchisor needs to ensure that their business passes the realism test. Franchising should not be considered as a cheap way to market. it’s a great model for the right products and services, as long as you can tick each of the following boxes. (1) The franchise can be easily replicated? Entrepreneurs opt for franchising to fast-track their market entry the benefit for them is that they don’t need to develop the product, content, market or materials from scratch. Think about your proposition from their perspective how compelling would the franchise be if you were in their position? (2) The franchise will be mutually profitable There needs to be a sufficient margin in the model for it to be a win for both the franchisor and franchisee. (3) The franchise has unique intellectual property
Your business proposition must have unique intellectual property that fulfills a fine balance of enabling franchisee to use and sell the product and service, without making it easy for them to copy it.