In an interview with Josiah Go for the Philippine Daily Inquirer, Generics Pharmacy chair and CEO Benjamin Liuson and successful franchiser was asked, : “When is a company ready to franchise it’s business?”
Here’s his answer:
Signs you are ready
“Perhaps the most important sign that your business is ready to be franchised is when you have been running a successful business for at least two years. Success should be measured in terms of high profitability and growing brand value.
“Having a business with high returns is important because you are going to share this profit with your franchisee in the form of royalty fees. If the profit margin is not high enough, you may end up with unhappy franchisees.
“Another aspect is the growing brand value of your business, which is an indicator that the consuming public has grown to love your brand. You will know this if you get a lot of inquiries if you are offering your business for franchise.”
Questions to ask
Franchise Funding Group suggests entrepreneurs ask themselves the following questions to determine their readiness to take the franchising route as a growth strategy:
- Is your business profitable and successful as it is now?
- Can your business be replicated and cloned? Is it scalable for national expansion?
- Are your systems in place that be replicated and followed by others? Are you ready to put down these systems in a manual?
- Is your business appealing enough for many other businesses to run in their respective locality or community?
- Are you prepared to spend significant energy, money and time into developing your franchise system?
- Are you ready to go from being a business owner to franchisor. In other words, are you ready for the responsibility of recruiting, training, and giving support to a number of business owners who will be your franchise partners?
- Are you willing to engage and pay for experienced franchise-law attorneys to help you with your legal documents and other requirements?
Photo: from business.financialpost.com