3 Questions to Ask Before Franchising Your Business

three questionsBetween building a larger community network, adding an additional revenue stream and the plethora of other advantages to turning your business into a franchise, it can seem like the obvious next step for business owners that are anxious to further growth.

While franchising can provide immense success, achieving better business margins is not guaranteed.

To determine if your business is ready, prompt an honest conversation with yourself with these three questions:

1. Have you seen consistent success?

While there are no rules about the required years of experience, revenue dollars, etc. before you can franchise, owners should be able to demonstrate that their concept is successful enough to take on a second location. Think about how you will pitch to potential franchisees when that day comes—you should be able to communicate the value of the business and the success they can reasonably expect from buying in.

2. Can the success be replicated?

Seeing business success is promising, but the revenue of the company doesn’t multiply just because the number of storefronts does. If your business gets boosts from a local event, one great shift lead or customers specific to your current neighborhood, attempting to replicate that might be challenging. However, if your operations don’t have many variables and you think a new region will benefit from your business, that’s a good sign that expanding will be a positive thing.

3. Are you ready to invest in your franchisees?

In large companies, the responsibility of providing training and resources doesn’t typically fall with the owner. Being a new franchisor means building that support network from scratch. Providing continuous support to franchisees is an investment in not only their success, but the success of the franchise as a whole—therefore it’s a responsibility that should not be taken lightly. The franchisor-franchisee relationship is equal parts manager and mentor, and you need to be ready to provide the guidance they will seek.

If you’d like to learn more about franchising your business, that’s our specialty! Contact Franchise Foundry today to learn more about what franchising can do for your business.

Entrepreneurship: Ideas and the Courage (Nerve) to See Them Through

“I always thought you needed to be innovative, original, to be an entrepreneur. Now I have a different perception. Entrepreneurs are the ones that make things happen. (That) takes focus, diligence, discipline, flexibility and perseverance. They can take an innovative idea and make it impactful. … successful entrepreneurs are also ones who take challenges in stride, adapt and adjust plans to accommodate whatever problems do come up.”

Steve Blank launched the Lean Startup movement. His work has changed how startups are built, how entrepreneurship is taught and how existing companies and the U.S. government innovate.

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Entrepreneurs Who Create Startup Businesses Have to Be Crazy

People who start companies are, without a doubt, just a little bit crazy. And people who start more than one company? Deranged lunatics — all of them! Why? Because it’s insanely hard! You’re signing up for a ridiculous amount of work. Your startup journey will be the wildest ride of your life.

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poker or chessPoker or Chess?

Do you plan your business strategy like you’re playing chess or poker? But, before you answer, consider the following…

“Industry executives and analysts often mistakenly talk about strategy as if it were some kind of chess match. But in chess, you have just two opponents, each with identical resources, and with luck playing a minimal role. The real world is much more like a poker game, with multiple players trying to make the best of whatever hand fortune has dealt them. In industry, Bill Gates owns the table until someone proves otherwise.”

– Deep thoughts by David Moschella

Is Courage a Necessary Trait for Success?

dreams.jpg2We never really hear enough about courage. The courage to take a risk, to stretch limits, to push forward, to go beyond, to keep moving… to make things happen regardless of the challenges in front of us.

Think about the early-day pioneers crossing the Midwest when they first caught a glimpse of the Rocky Mountains and stared at them getting bigger and bigger as they approached over a few days. What unbelievable courage they must’ve had to continue not only towards the mountains, but up into them and through them, often having to go north or south for awhile to keep making progress forward, and despite the elements of weather and resulting hardships. They believed in their dreams and as a result of their relentless courage, their goals were achieved.

The Cowardly Lion’s Thoughts on Courage

lionIn his most famous song, the Lion muses on what it would be like if he had ​any courage (not realizing he already has plenty):

Cowardly Lion: [singing]
I’m afraid there’s no denyin’
I’m just a dandy-lion
A fate I don’t deserve
I’m sure I could show my prowess
Be a lion, not a mouse
If I only had the nerve.

 

QSR & Pizza Fueling Franchise Growth

Fast-Food-2Each year the International Franchise Association commissions a study from PwC (PricewaterhouseCoopers) on the economic impact of franchising in the U.S. Highlights from that study include the following:

  • Taking into account the indirect impact of franchised businesses, business format franchises support more than 13.2 million jobs, $1.6 trillion in economic output for the U.S. economy, and 5.8 percent of the country’s GDP.
  • Franchise businesses provided more jobs in 2016 than wholesale trade, transportation and warehousing, nondurable goods manufacturing, and information (including software and print publishing, motion pictures and videos, radio and television broadcasting, and telecommunications carriers and resellers).
  • Quick service restaurants (QSR) is the largest category, representing 25 percent of all franchise establishments and 45.5 percent of all franchise jobs.
  • Jobs supported because of franchise businesses were at least 10 percent of the private sector nonfarm workforce in 33 states, and at least 6 percent in every state.
  • The number of people employed by franchises is greatest in California, Texas, Florida, Illinois, and Ohio.
  • Franchisees own and operate 88 percent of all business format franchise establishments and franchisors own and operate 12 percent.

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Quick Serve Franchise Sector Continues to Blaze a Trail for Franchising

There is little doubt that the franchise industry is undergoing significant changes fueled in great part by the success of various PE firms that began in the QSR sector. As other franchise sectors are targeted by PE investors, the competitive environment in those sectors will become more challenging. In order to prepare for these challenges, small to medium sized franchises will need to become successful franchise systems that produces sustained system growth, successful franchisees and an efficient operating system.

Multi-unit franchisee ownership that originated in the QSR sector continues to increase as franchisors seek large multi-unit franchisees that can own and operate more franchise units.This ownership model provides organizational stability, ample financial resources, sustained growth and economies of scale to the franchisee operation.

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Who’s Winning the Pizza Wars?

Welcome to the pizza wars, where brands big and small, quick-service and fast-casual alike face two choices: pick up the pace and earn relevancy through definitive, clear marketplace differentiation or step aside.

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