Franchising is one way to expand your business and establish additional revenue streams without having to personally fund, manage, and operate multiple business locations.
With the most common franchise form, called business format franchising, you sell your complete business system and rights to your brand name or trademark to franchisees who then own and operate the business according to your rules. Since the franchisees make a substantial commitment in both money and time, they are highly motivated to make the franchise successful, which can help your business grow even faster.
Only certain types of businesses can be successfully franchised. Fast food enterprises may be what most people associate with franchises, but there are more than 75 industries that operate within the franchising format, including automotive, electronics, retail, food, financial services, sports and recreation, travel, and many others.
While food businesses make up a quarter of all ranked franchise companies, the expansion of technology and a change in consumer demands and are two reasons why categories on the rise in 2018 include:
- Child care, including learning centers, daycare services, and sitters and tutors.
- Fitness and Health Services, including gyms and physical therapy practices.
- Senior Care, including non-medical independent living, medical care and staffing, companion care, and transportation.
Here are a few things to consider as you determine if your business model could succeed as a franchise.
- You need a superior product or service that is in enough demand to encourage other entrepreneurs to buy into it.
- Your business system must be teachable. A franchisor develops a detailed operating manual explaining every aspect of running the business and also provides training to prospective owners. If your company is overly dependent on your unique skill sets or knowledge, it will be difficult, if not impossible, to sufficiently train others to be as successful as you.
- Your business concept must be easy to duplicate in multiple locations. If it can only function in specific geographic areas, it may not be franchisable on a large scale.
