Does Franchising a Small Business Mean You Have to Lose Control?

You are a hardworking entrepreneur, who is running a successful small business. Your customers are impressed with your business and you are often asked about more locations. However you have some real reservations about expansion, and are particularly worried that expansion means losing control of what you started.  Does franchising a small business mean that all control is lost?  Let’s explore this for a few minutes.

Typically, in a situation like described above, you are already operating at high capacity and are handling most all of your business operations in-house (sales, marketing, accounts receivable, etc.). Now you are at the point where you are thinking about franchising your small business. You are excited but have doubts surrounding giving up control. Get ready, we are going to show you why when franchising a small business it does not mean losing control!

Franchising can mean expansion AND control!

Franchising a small business does NOT mean a loss of control. In fact when the franchise structure is built (and is done correctly), control by the franchisor on how the business must be operated is inherently part of the relationship (see how franchises are structured). In other words, if Timmy wants to play ball, then he must follow the rules; otherwise, there are consequences. Of course, there is a fine balance because we do not want a franchisor to have any vicarious liability coming back to them (we will leave that one for our President Dave to explain).

So what might be a couple of “fears” you may have about losing control?

“I have trade secrets that I don’t want to give away.”

Trade secrets, proprietary methods, exclusive relationships, etc., are all maintained in confidence when you franchise. Within the franchise agreement, franchisees may be required to purchase product from you, thus keeping select components and/or processes confidential (this is also one of the ways you can make money franchising…learn about others).

“We’ve spoiled our clients with our high level of service and quality… that’s hard to replicate.”

It is important to understand that as a franchisor you will “award” franchises to the right applicant, not simply “sell” a franchise to anyone who has the money to do it. So it is in your best interest to pick the right operator (franchisee). As a franchisors you will need to know how to look for someone “just like you”, who will embrace your business and its philosophy, which, in turn, will determine if the operator is a huge success in their own market (check out our article on the topic of finding the right operators for a franchise)

At The Franchise Maker, our comprehensive franchise development program takes into consideration all these concerns and more (learn about our strategy to franchise your business). We work with you to create a customized franchise package that protects you and represents your best interests.

So if you are an entrepreneur with a tight grip on your business “throttle”, you can now confidently be at ease when thinking about franchising as a way to grow their business.

At The Franchise Maker we can slowly pry each finger off the throttle and help you understand how your role as franchisor can both allow you to expand AND maintain control at the same time (learn more about your role when becoming a franchisor). Call us directly at 1-877-615-5177 or contact us to learn more about how you can retain control when franchising your business.