Some Businesses Should Not Be Franchised

If you run a business and are thinking of ways to grow it and make it more profitable, you may think that franchising it would be an easy way of accomplishing this. Franchising is often a smart move, but not every business lends itself to being franchised.


Financially Sound?

Franchising is not suitable for a business that is not financially sound. Setting up a franchise is costly and involves a great deal of scrutiny, not only from franchise attorneys and the Canadian Franchise Association to determine that the business is suitable for franchising, but also from prospective franchisees. Failing to satisfy their checks and balances can be difficult for a financially unstable business. Prospective franchisees are unlikely to want to buy into a business that does not have a financially successful track record.


Long-Term Plan?

Businesses that do not have a long-term plan to maintain their success are also unlikely to be suitable candidates for franchising. Franchisees will be unwilling to commit to a business that they see no viable future for, so if your business is only satisfying a short-term need and will then be disbanded, rebranded or subjected to a change of strategic direction, it is probably best to keep it under your own control and avoid franchising.

Business owners who have managed to create a thriving business may feel quite confident franchising it, but they must consider whether they will be able to provide franchisees with the tools and expertise they need to replicate their success. Sometimes a business is successful because of the person who is running it, or because the service or product delivered is suited only to their location. In these instances, it can be challenging - if not impossible - for somebody else in a different location to achieve the same success.


Training and Support?

Finally, no matter how successful a business is, if its owner does not have the time, finances or patience to commit to training and supporting franchisees while maintaining a firm hold on their business, they will not be suited to being a franchisor. Franchising requires immense amounts of commitment and dedication, and often franchisors will spend more time setting up, training and mentoring their franchisees than they will running their business, at least in the early stages of the franchising journey.


If you are considering franchising your business, you should carefully consider whether your business model is suitable to being franchised and whether you are personally ready and committed to the process. If you are not, perhaps you may prefer to continue running your successful business as a standalone unit or exploring alternative ways of maximizing your gains. If, however, you feel that you are ready to embark on a journey to franchising, don't be afraid to ask for help and support from qualified experts.