Is franchising the best way to expand your business?

You want to expand your business and you want to know if franchising is the best way. To help clarify this issue, this article will focus on simplifying this topic. When you consider extensions, you need to keep in mind the following three points:

• You want your business partner to use your business name [your brand],
• How do you want them to run their business; and
• You want them to pay for you now and continuously.

If all three of these conditions exist, the law requires you to have a franchise. Some people find that franchisees can be costly and try to use different names for their networks, such as agents, licenses or other forms of business opportunities. But as they say: "If it looks like a duck, swim like a duck, howling like a duck, it might be a duck." So, no matter what you call it, if it has all three of the above Condition, it is a franchise. If you call something else and be challenged, you will fail and will likely have to pay severe penalties depending on the content of the dispute or the location of the country in which it is located.

On the other hand, you may meet the definition of franchise as specified in the franchise rules and may have the desire, resources and energy of the franchise business, but there are more to this decision. You need to ask yourself more questions, such as:

• If you have to pay someone a royalties, is your business still profitable?
• Do you have a marketing, management and operations system?
• Can you easily teach these systems to others?
• Will you provide value to your franchisee, not only in the first year, but will continue to be offered to your franchisee during the term of the franchise agreement?
• Do you have a "secret sauce"? That is: Do you have a significant competitive advantage that allows you to stand out from the competition and do the same for your franchisee?
• Do you have the resources [time and money] to invest in franchising?
• Do you want to turn your current work into a franchise business, including recruiting, training and supporting franchising, and ensuring your company is ahead of the competition?
• Are you taking advantage of the technology in your business? Are you willing to invest in future technologies to achieve communication, marketing, management and efficiency?

If your answer to these questions is "No" then the franchise may not be your best answer at the moment. Before considering a franchise business, you need to consider some things first. Other articles will explore the conditions that must be met before the franchise business. Be sure to follow this information.

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