Questions to Ask Before Saying, 'Honey, I Think We're Ready to Franchise'
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
While I am not making sandwiches every day now, I’m building a brand and helping others to be successful. If that’s not in your DNA, you have no business franchising.
As a three-time franchisor, I get a lot of calls from clients and colleagues for advice on when and if they should franchise. Typically, these phone calls and interviews are brief. In my experience, there are three simple factors that can help you gauge the success or failure of your business as a franchise, and as the entrepreneur, you are the only one that can answer them.
So rather than wasting tens of thousands of dollars on hiring a consulting firm to assess the feasibility of your success as a franchise, take a day off and engage in some self-reflection. With honesty and clear vision, the smoke will rise and you’ll know if the franchise is to be or not to be.
Why you, why now? Remember that moment when you looked at your spouse and said, “Honey, I think we’re ready to have kids?” There’s a right time and a wrong time for that decision. For some, it’s simply not in the cards. Do you want kids because everyone else is doing it? Are you bored and looking for a new, exciting adventure? Or is there truly something about raising a child that fits your disposition and that of your partner? Is it financially feasible? Can you even answer why?
The last thing you want to do is jump into franchising without a concrete understanding of why you want to do so. When I ask you “why” it is not to stump you, but it’s an answer I’d expect all entrepreneurs to know and live by, all day, every day. It requires a clear understanding of your purpose, incentive and sales and the needs of your clientele. Don’t make me end the call after this first question, there’s so much more to talk about.
Is there a line out the door? Over a decade ago, when we opened the first Which Wich, popular demand was so palpable that it was nearly overwhelming. We were on covers of national magazines, restaurant traffic was non-stop from open to close, and customers were asking for franchise information at the counter. I decided to do an open house to invite those interested in franchising to pitch their plan.
When your concept is so attractive that it causes the masses to congregate and rally for an opportunity to collaborate, you are one step closer to having a marketable franchise. In this way, the “line out the door” represents both consumer demand and potential business partners to grow your business. If people are willing to wait for your service, in our instant gratification culture, your next responsibility is to evaluate the line. Are these returning customers? Are they asking questions about getting involved? These are signs that you may be on your way to a franchise.
Have you put in the time? Even if you’re positive that you have ticked all the necessary boxes to establish your franchise -- the product, popular demand and the previous franchising success to boot --without one full year of company history, data, sales records and a clear idea for how your company would operate in all four seasons, you’re only as good as those few months that you’ve been in business.
Considering a franchise before at least one full year of business is absolutely criminal in my mind. It’s reckless. Without a history to provide data on the patterns and fluctuations in your company, how could you possibly plan for the future?
Franchising is a scalable business and only one of the many ways to grow your company. If these three elements aren’t there, and you don’t know why, how or to what populace you will be targeting your franchise, just forget franchising and focus on growing your business in other ways. Taking that breath before diving in taught me invaluable lessons about business and people and these lessons have sustained us since.
If you take nothing else away from this piece, don’t let your business be among the 98 percent that fail within the first 10 years of their existence. Using this list, you can arrive at the answers to your own questions.
Is it feasible? You tell me.