Should Moms Franchise Their Business?
When you have a successful business model, you can't help but wonder how to grow it. Often, that model of growth is franchising. But is franchising right for mom entrepreneurs? That depends on why you own a business.
If your primary reason is to be home with your kids, then it's probably not the time for franchising. When you decide to franchise, you're no longer in your original business. You enter the world of franchising where you need to learn how to replicate your business, support franchisees and uphold the legal requirements of franchising.
Most companies decide to franchise because they want growth but lack the capital to grow on their own. Franchisees pay you for the opportunity to expand, so you have less capital risk as you grow the business. You don't have to worry about staffing the business and negotiating the leases because your franchisee takes all this on. You get to grow your business and make a percentage of the profits. Sound too good to be true? Let's look at the grass on the other side of the fence.
You first need a successful business with a healthy bottom line. No one wants to invest in a company that even the founder can't run successfully. Franchising your business takes a significant amount of research, legal work and testing before launch. Expect to spend anywhere from $50,000 to $150,000, depending on your franchise's reach.
You'll need a written business plan, the proper legal documentation as required by the FTC and depending on where the franchises are being sold, state registrations. Often in business, we wing it as we go. That won't work when you're a franchise. Your systems need to be well thought out, teachable and easily replicable. You need thorough operations manuals, training manuals and systems to support your franchisees. If your business was selling widgets, now your business is selling franchises and supporting franchisees. Their business is selling widgets.
Finally, you might have to run your current business on a shoestring, but you need to have working capital when franchising. The FTC and the regulation states will want to know you have enough capital to stay in business for your franchisees. The key to your success will lead to the success of your franchisees. If you feel that others can be as successful with your business as you are, then this might be a model for you.
Where does being a mom entrepreneur come into this? When you work for yourself, you know your scope of responsibilities. You call your own shots and can take it as fast or slow as you wish. When you are a franchisor, you essentially work for your franchisees. If they have a need, you have to fill it. Your franchisees are going to expect support, quality products and excellent service. You need to have access to expertise, staffing and time for your franchisees.
You can't run a franchise business alone as there are too many roles to fill. Make sure you have a staff that's ready to handle franchise administration, franchise support, marketing and more. If you started your business to be home with your kids most of the time, then franchising is probably not the right choice for you. That is, unless you have enough capital to hire staff and support so that you're not the one filling all the shoes.
If you have absolute confidence that expanding your business is a good thing, and you're ready to juggle the role of motherhood with a totally new business venture, then this might be the right time for you.
But keep in mind, not all businesses are good models for franchising. Is yours? Here's what a good franchise should be:
- Unique. It's hard to find a new franchise concept. If you have found one, ask yourself whether you're lucky or there's a reason that no one has wanted to do this before. Even if you're not first to market, how is your business different than the competition?
- Teachable. Not all franchisees will be just like you. They will come with different experiences. Is your business teachable to anyone interested?
- Not easily copied. Is your business special enough that someone will want to franchise it or would they rather do it on their own? If you have a service business, make sure the brand is desirable enough that people would want to go with you for that reason.
If franchising does feel right for you, find a consultant and an attorney who specialize in franchising. Also, check out Entrepreneur.com's " Franchising Your Business " columnist, Mark Siebert, for more information.