Ask whether the world really needs another sub sandwich shop, or
why someone would want to gold-plate his or her widgets your way.
Your best bet, assuming you don't have huge amounts of cash to
throw around, is to find a niche that's not already overwhelmed
with franchisors. You may make the best hamburger ever, but-news
flash-hamburgers have already been done.
The niche could be a different product, or you could franchise a
fairly standard product in smaller markets where the big boys
don't bother to go. Either way, if you're extremely
fortunate, you might be able to sell a handful of franchises in the
first year. That means, if you watch your costs, you might be able
to recoup your investment in preparing the manuals, offering
circulars, brochures and training programs. You must be ready for
the long haul. Although franchise growth can be exponential once
you've established yourself, those first 25 franchisees will be
the toughest to earn.
Establish a Growth
Strategy
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Your first franchisees will likely be within your immediate
sphere of influence, so keep franchise brochures on the counter at
your stores. But keep in mind, a fast way to kill a new chain is to
sell franchises without any cogent plan for growth. New franchisors
are often so eager, they're prone to sell a franchise to anyone
who's interested. Then, when it comes time to provide support
to one unit in New York, one in California and one in South Dakota,
the franchisor is forced to exhaust its resources merely doing what
it promised.
Accordingly, in the absence of an expansive budget, strong
chains grow in concentric circles so brand names gain recognition
in specific areas, marketing dollars can be combined for better
market penetration and economies of scale are created. Even then,
you'll be required to add operations and sales support
personnel as you grow, while you keep a very close view of your
cash flow.
You have a better chance if you have a record of profitability
that stretches back a few years and have made the effort to
systematize your operation.
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