7 Major Questions Answered About Franchising Your Business

Learn if you are ready to Franchise your Business. Have you made your New Year’s resolutions? Have you set your business plans and strategy for next year?

If you are like many of the entrepreneurs we meet you are probably hopeful, ambitious, and ready for a fantastic next year! And with your revitalized ambition at the beginning of the year, the next question enters your mind; “Is this the year I should figure out how to franchise my business?”

The focus of the next several paragraphs will be to help you begin exploring if you should franchise your business and how to know if you are ready. Let’s begin with if this year is the right time to franchise your business. Below is a list of some of the trigger points which would lead you to consider franchising. If one or multiple of these apply to you then you might want to franchise your business this year.

Question 1: Do customers, friends, and/or family keep asking me about franchising my business?

This is one of the most obvious and common reasons entrepreneurs call me for a free franchise consultation. Are you in a similar situation? Do you have customers walking into your location asking about buying a franchise? Are you providing service and after completing the job your customer asks if you have a franchise near where their brother lives?

This is one of the strongest indicators that you are on to something worth franchising and the time to ask yourself, “should I franchise my business?”. As the old adage goes, if your customers are asking for it you should probably sell it to them.

Question 2: Has my business plateaued and do I still want to grow?

If you are like many entrepreneurs your business will eventually hit a revenue plateau and your future growth will be relatively limited without opening additional units or territories. This occurs most often in businesses which have been in operation for five or more years or with hungry business owners interested in continuing to grow.

Question 3: Is the cost of opening a second, third, or fourth unit too much?

If you feel constrained by your ability to financially open up multiple units it might be a good idea to consider franchising. Often times to franchise your business costs the same as, or less than, opening an additional company-owned unit.

Question 4: Do I have a new or unique business, product, or service?

If you have a new or unique business model with no major competition now might be the time to consider franchising. For entrepreneurs in this type of situation SPEED to market becomes the most pressing issue. If you have the opportunity to become the first major player nationally in your market space it is a distinct and extremely valuable competitive advantage.

Question 5: What if I have tried opening additional company-owned units and it didn’t work?

We have met with many business owners who over the years have opened additional company-owned locations or territories only to end up closing most of them at some point. In speaking with these owners there are many common threads as to why this did not work. The most common reason is the lack of effective management in the new unit. With company-owned locations, a manager is typically put in place. This could be a crap shoot betting on the future manager to run the location. Franchising provides you with the ability to put a vested owner/operator into a new location and help reduce the risk of poor management.

Question 6: Could a franchisee earn a good living and a return on their investment?

If you can train a franchisee how to run your business and they could make a profit and return on their investment, then franchising your business might be worth considering. We use a typical formula for an owner-operator of a franchise to be able to earn a manager’s salary (basically what you would pay someone to run your business if you did not manage it full time) plus have the ability to make a 20 per cent return on their cash investment after two years in operation.

Question 7: When is the time right time to consider franchising?

Well, there is no secret to identifying this. There are a number of factors to consider in the timing of your expansion: the life cycle of your existing business, your family situation, your health, your goals for the future, your exit plan, your retirement strategy, and your level of ambition to try something new.

There is no right time to franchise as long as you believe and know it is the right time for you. Ultimately in franchising if you believe you can teach someone how to run your business and they can make a profit running it then you should consider franchising as an expansion option.


Franchising is not an end-all game. Most often we will see business owners couple other expansion strategies with franchising.

If you are asking questions like, “What’s next? How can I continue to grow? How can I keep earning money without relying exclusively on how hard I work each day?” Then this is an expansion strategy worth considering.

If franchising is a consideration our organization, Franchise Marketing Systems, offers a variety of free resources including a franchise quiz educational webinar and a free no-obligation consultation.

Tom DuFore
 is the Chief Operating Officer for Franchise Marketing Systems. In his critical role, he is responsible for the oversight of Franchise Marketing Systems Operations and consulting with and advising FMS Clients. Tom has personally worked with and advised hundreds of businesses ranging from the largest companies in the world to start-ups. Learn more about the Franchise Marketing Systems Franchise Expansion Consultants.

This original content piece first appeared both in Franchising USA’s print and digital formats in January 2015. 

Franchising USA is a monthly digital publication bringing you all the latest news, expert advice, and information from the world of franchising.  Written with franchisees in mind, Franchising USA is a valuable resource for legal and financial advice, marketing and business information, as well as franchise profiles and in-depth features.

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