Can Any Business be Franchised?

Look closely at the different services you use or businesses you purchase from. It’s likely that many of them are franchises! Technically speaking, any type of business can be franchised (read about the different types of businesses we have franchised). However it is important to assess what your business really has to offer and will continue to offer someone if you are exploring the idea of franchising as part of your end game.

Each year we talk with hundreds of business owners, like you, about franchising their business (see a list of what we do to franchise a business). It is easy to rationalize franchising for a typical storefront business, but there are several less-than-obvious types of businesses that can also be franchised. Let’s review a few key points to consider when determining whether or not your business should be franchised.

  • Seasonal Businesses 

If your business does a majority of the work during certain times of the year then your business fills a niche. Landscaping services, tax preparation services, event planning, holiday décor services, are just a few examples of these types of niche businesses. If your business has the key elements to make it a solid franchise model (take a look at this article that talks about the “Key Points to Building a Successful Franchise”), then your seasonal business can certainly be franchised.

  • It’s “Just a Product” 

You have developed an awesome product. Maybe it has even been patented (although that’s not required). Your product is currently being sold in stores, on the Internet, etc. and there’s a growing demand for it.

Lets say you have built a business around these products. For example: maybe you created a line of haircare products (or have privately labeled a line of haircare products) and have built a salon featuring the use and sale of these products. Not only are you using and selling your products, you have also developed specific methods, techniques and processes when running the salon all of which you confident you can teach someone else how to do the same thing.  If what you have done is built an entire business model around your products, then franchising may make sense. However if you are just about selling products without anything else (for example only selling products on the Internet without an operational business or a business that does not offer some type of service with the product), then franchising is not your path. Keep in mind, franchising is about leveraging the best practices you have developed with regards to your business operations, services, methods, processes, sales and marketing strategies (just to name a few) when running your business.

  • New Businesses 

Typically we steer clear of brand new businesses wanting to franchise simply due to a lack of “proof of concept”. But if you are a seasoned entrepreneur who brings industry experience to the table and you come to us with an innovative concept that is well-researched, well-designed, new on the scene and you’re in the midst of opening your first location …we listen. 

On another note if when you opened your new business and you immediately experienced one or more of the following: a demand for your services and/or products because they are unique and different, requests to open more locations, sales that exceeded your expectations, publicity and/or articles written about your business or even people asking if you are already a franchise then these are signs that it may be time to think about franchising. Even though you may not have a lot of operational time under your belt, it is possible for you to hit the pavement running in the franchising world.

  • “Carve Out” Business

This often happens purely by chance. You have a business you have been operating for many years and you offer many services and/or different products within your business. It may not make sense to franchise your entire business model because it may be too complex, but you can easily carve out part of what you do and turn it into a teachable business that can be franchised. For example: perhaps you own a laboratory that tests various substances and you also offer inspection services to collect samples of the various substances that you test. In this example you may want to carve out the inspection services part of your business and offer that part as a own stand-alone franchise eliminating the need for future franchisees to build out their own laboratory (because in this example, we can require that the samples they collect must be processed through your laboratory). When all the elements are in place for building an independent business model from your “carve out” business which has proof of concept, then that portion of your business can absolutely be franchised.

What NOT to Franchise

Needless to say, we turn away many ambitious business owners and advise them against franchising their business. Why? Just because you can franchise, it doesn’t mean you SHOULD franchise (in fact our President turns away about 90% of the businesses he speaks with about franchising)! If your business is franchised too soon it could mean failure for not only you but also anyone who buys into your program (read “Dangers of Franchising Your Business Too Soon”). Now let’s review some top reasons NOT to franchise your business.   

  • Your business is not in operation.

You may have an idea about a business that you want to franchise, but it is not operational.  In fact you have not generated any revenue, you have not started offering any services or selling any products and you really have no idea if there is even a demand for the type of business you want to franchise (see “Does a Business Need to be in Operation Before Franchising?”). Our advice: get the business operational.

  • It is just a “hobby business”.

Your business is considered a “hobby business” if it is something you do part-time while working full-time,  is not treated seriously enough to replace your income and is done mostly for fun (to make some cash on the side). For example perhaps you make jewelry and sell it at farmers markets or festivals either on the weekends or sporadically throughout the year.  Our advice: turn it into a real business, not just something done when you feel like making a little extra cash.

  • Your current business is not making money.

You may be thinking of franchising is a way for you to make money because your current business is NOT making money. Or perhaps a way for you to get more customers for your own business. The idea behind franchising is to roll out a program that when followed, will generate success, not failure, for someone else to operate. Think about it…if you are struggling to keep your own business afloat how can you teach someone else to be successful? Franchising is not about bringing on other people simply to collect money or to test out what works.  Our advice: Grow your business and make it work for yourself before even thinking about expansion.

  • You are a control freak.

The business model that you created may lend itself to franchising, but if perhaps you have a hard time training other people or are afraid of teaching someone you methods and processes. This can be a problem. If you believe you have to do everything yourself (because no one else can do it the way you do) this is the type of “control freak” characteristic that does not lend well to franchising (read how being a bit of a control freak can be beneficial when franchising). Franchising is about maintaining some control for consistency purposes but also being able to let go of day-to-day operations and teaching someone else how to operate your business. Our advice: If you are looking to expand and want control over all day-to-day operations, then you are better off opening more locations yourself.

As you can see franchising is not for everyone or for every business, but it can be a powerful vehicle for growth when it makes sense! To determine if your business makes sense to franchise you can call us directly at 1-877-615-5177 or you can request information through our website. We will gladly chat with you. If franchising does make sense, we will take you through our proprietary franchise development process and put together a franchise program that is as unique and different as your business. We will position you to start offering franchise opportunities nationwide.