Should You Franchise Your Business Idea?
Many people decide to launch a business around an idea. They may have a plan to create an unusual product or service and feel that they have a "killer" USP. However, when the business takes off and becomes successful, they may wonder how to keep the momentum going, and one solution is to consider a franchise. Is this something you should think about in your case, and what do you need to bear in mind?
Looking at the Options
Firstly, consider what it would take to grow your business based on its current footprint. You might have to move into new premises, train and hire new staff, order additional stock and put in place other services. All of these moves would involve considerable financial outlay, and you may need to borrow or find an investor.
Alternatively, you could get other people to do this for you by franchising your solution. You wouldn't need to incur all of those headaches and additional costs, but you may be able to get income by way of a franchise fee from third-party individuals.
When this is done well, it can certainly help to grow a business idea exponentially. Indeed, you may be aware of many franchise operations in your local shopping centre, for example. Yes, you may still have to invest a certain amount in establishing the franchise system, but you won't need to introduce heavy funding as you would have with your original idea. Instead, the franchisees will pay for the rights to trade your business idea, using their capital and funding for the ongoing costs.
You may not earn as much profit from an individual operation in this case. After all, you need to ensure that your franchisee can make a good profit as well, so you need to take a smaller slice of the cake. Yet still, this can be a numbers game. If you are successful and get many different franchises, each within its own operating territory, you will have many different income streams.
How to Get Help
Before going too far down this road, you need to explore the ins and outs in detail and look at various franchising models. To do this, you will need help from experts and should talk with an accountant who specialises in business development. They will help you to cost the process and make projections and, as needed, put you in touch with other professionals. Reach out to a professional who provides business management services for advice.