Richard O’Brien
Director of operations at NZ bizbuysell.
www.nzbizbuysell.co.nz
Are you planning an expansion strategy? Franchising can be a great way to upscale your business fast.
But whether it’s the right strategy for you depends on the nature and state of your business and your own personal goals and commitment.
A good idea is not enough
Some people make the mistake of thinking they can make their millions by franchising a good idea. But the reality is, no one is going to pay you for just an idea – you need something tangible to sell.
Is your business franchisable?
No matter how successful your business is, it won’t work as a franchise unless it appears to be a good business opportunity.
What makes a sellable business opportunity?
First, your franchise needs to capture the imagination of potential business owners. It needs to appeal to them on both personal and business levels.
Your business also needs to offer a good product or service with a solid business system, which is in a secure market position. And needless to say, it needs to offer good rewards – profits, turnover, growth potential and working conditions.
Is your business teachable?
Knowledge is power and in the case of franchises, passing on knowledge is essential. Like new employees, your franchisees will need to learn the ropes. This means taking time to ensure all your operating procedures, manuals, product information, etc, is all in order and easily accessible.
The legal stuff
When it comes time to franchise, you’ll need a franchise agreement, which forms the contract between you, the franchisor, and your franchisees, and a disclosure document which includes full details about how the franchise will operate.
These documents require a great deal of consideration and attention to detail as to what you will and won’t provide, how it works, the obligations of both parties and the financial considerations. Check out our list of franchise specialists, including lawyers, accountants and consultants, who can provide assistance with the nitty-gritty.
