Becoming A Franchisor
Number of locations – How many locations do I need to start a franchise business?
The simple answer is none, however, when deciding to develop a franchise, you must first ask yourself whether the success is due to your hard work, location and hands-on management as opposed to the general business concept. There are many successful businesses in the market; however, not alt are suitable for franchising. You may want to establish multiple business locations and run them based on the System YOU have developed before looking for franchisees. Only by having multiple locations will you truly know if your idea or concept can be boxed and sold. In addition, this will given you the opportunity to develop manuals setting out the procedures to be followed by franchisees to ensure conformity amongst alt franchise Locations. As for the number of locations, there is no right or wrong number but it should be high enough so that you feel confident it is your business model which is causing your success.
Credibility – If I want to franchise why should I have more than one location?
In opening multiple locations, you will also have the opportunity to “get the bugs out of the system” so to speak. Opening multiple sites will also make your business more credible in that potential franchisees can see the success your various locations.
Systems development – I have a very successful business I want to convert to a franchise what should I do?
A mistake often made in trying to start a franchise business is not fully appreciating the complexities associated with franchising. Franchising is a business unto itself. In my experience, clients have relied on their current management employees to over-see their existing businesses while they focus on developing the franchises. If you are Like most successful entrepreneurs you probably spend 50-70 hours a week in running your business. lt may be that the reason your management team is so efficient is, in no small part, due to your consistent supervision. Becoming a Franchisor is the same as starting a whole new business. If you are alone in the venture you could be seriously jeopardizing your existing business if you try to Franchise. You need the rquisite support, both internally in running your business, and externally by engaging professionals who deal with Franchising on a regular basis.
Key components – What are some of the major things I should be aware of if I want to start a franchise business?
Some of the many things to consider when setting up a franchising operation is: a) finding good locations for the franchise b) finding a franchisee to whom you intend sell the franchise c) Careful screening process for such candidates d) building the franchise location in conformity with all pre-existing stores e) training the franchisee and f) the creation of a very detailed training/operating manual. Depending on the number of franchises you decide to sell, this process will be continuous, except you now have to monitor existing franchisees to ensure that the stores are operating in concert with the prescribed procedures. This becomes a job in itself and you may find yourself over-extended and unable to successfully carry out alt that is required of an entrepreneur and franchisor.
Statutory compliance – Are there any rules or regulations governing starting a franchise?
Under Ontario law, a franchisor must comply with the Arthur Wishart Act, which provides for timely and complete disclosure to potential franchisees. Further, as a franchisor you are under a legal obligation to treat franchisees in a fair and even-handed manner. Compliance with the franchising legislation and the development of a successful franchise can be best accomplished by ensuring your franchising endeavours are well planned.