Well, you have read everything written about franchising, sought the advice of a franchise expert, spoken to your accountant and lawyer, discussed the matter with the bank manager and consulted your brother-in-law (who has eaten in hundreds of franchised restaurants over the years) and you all agree that your own particular business is franchisable. Are you ready to start preparing a franchise program? Absolutely not!

All too often, the decision to franchise is made based upon the fact that the business is franchisable, without any consideration being given to the following questions:

  1. What will the impact be on my existing business?
  2. How will it change my activities and responsibilities?
  3. What financing do I require?
  4. Where will I obtain the various skills necessary in planning, implementing and administering a franchise program?
  5. What alternatives exist to expansion through franchising and are these alternatives more attractive to me?

 The early stages of your franchise system will require a considerable amount of your valuable time. Even if you decide to work with franchise professionals, you will be required to be part of the planning process because, after all, you are the original success story everyone is attempting to clone. You then must come to terms with the fact that you will not always be able to tend to the original business and others will have to take your place. If you cannot find and train the right people, you could seriously reduce your earnings and cash flow. Remember, most franchise systems do not become profitable for the franchisor until a number of units, sometimes as many as ten or more, are up and running smoothly. Consequently, you may have to rely on the original business for some time to support you and provide the working capital necessary for the franchise expansion. The flagship business may also be jeopardized by the fact that your franchisees are using your trademarks, style of doing business and appearance. Disgruntled customers will direct their wrath at the system as a whole and you may not have a business to go back to, if the franchise expansion fails.