3 things you MUST have before you franchise your business

Your business has really taken off and you’re considering expanding. Do you sell, open more locations or franchise? Each has its pros and cons. More locations can mean margins stay in your hands, selling your idea results in immediate income, and franchising allows you to share the workload while still benefitting from the revenue.  Before you go ahead and make any big decisions, we’d like to lay out 3 things you need to know before you franchise your business.


For any business to be successful, it has to be based on a sound idea. The best marketing efforts, research and development, advertising and management can’t make up for an idea or product that simply doesn’t resonate with consumers. While many business owners may be energetic about expanding their businesses to other locations, they may need to consider if their concept and idea is sound enough to expand into other markets where other consumers may have different preferences.

Experts say that the best concepts are those that offer products that the public is familiar with, but that have a unique and value-adding twist to them. Taking a basic product like noodles, burgers, oil changes, gasoline or ice cream, and adding a unique twist like faster speed, lower price, cooler packaging or better service is what will make a product valuable to the individual, while keeping it adaptable to the masses.

Papa Murphy’s concept does just that. They sell something everyone understands and can relate to: pizza. But, they differentiate themselves from their competitors by offering take-and-bake pizzas rather than ready-made ones. By not baking the pizzas in house, they don’t have to buy expensive ovens and kitchens, which saves them money, and in turn saves their consumers money. They can offer their product at a lower price point while retaining the high quality of their competitors. This fills a gap that a certain demographic is looking for, which has made them successful.


­Franchising your business doesn’t allows you to save money on real estate, but it still requires a high amount of capital, depending on the aggressiveness of your franchise sales plans. Before diving into franchising, consider slower growth, finding debt financing or taking on partners, which may be better alternatives, depending on your situation.

Starting the franchising process can easily cost the franchisor between $100,000 and $250,000. This is no small sum. Be sure that your company has the financial resources to start and can follow through all the way until you’ve sold enough franchises to pay back the costs.


Even with a sound concept and ample capital, a business can fall flat if it’s not pushed along by those who believe in it and have the drive to get it to the next level.

Good managers can see the company’s vision for the future. They understand its goals, how it is positioned in the market and what the future holds for the industry. They can see its competitor’s weaknesses and know how to use them as strengths. They then can apply the vision, making sure everything they do is contributing to, rather than taking away from, the company’s future.

The management should be the pickiest of all employees, ensuring that everything done throughout the company is up to par with the vision. Ray Kroc, the man who started the franchising of McDonald’s, set very strict guidelines regarding portion sizes, preparation, packaging and cooking methods to ensure that the food at McDonald’s would look and taste the same across all its franchises. He grew the franchise from its start with a few restaurants in California to 7,500 locations in 31 countries. It was said that he went as far as picking up trash in his franchisee’s parking lots to show them the standard that they were expected to live up to. This is the kind of leadership it takes to make a successful franchise.

Lastly, management needs to do more than talk and inspire, they need to sell. They must have the drive and believe in the concept enough to close the deals that will lead to the company’s success.

If you’re looking to franchise your business and could use help with marketing, let us know.