5 Factors to Consider When Developing Your Franchise Model
A well-thought-out franchise model is a great way for successful businesses to grow, and for entrepreneurs to work within a secure environment. But before you consider going the franchise route, however, franchise lawyer Harold Kestenbaum recommends that you consider the following 5 factors to guarantee that your business operates at peak capacity.
1. Your franchise model must be based on an existing and functioning business.
An idea is just an idea until it is proven in the physical world. Your franchise needs a successful starting point before it can become an actual chain. Until you can prove that the original model that you want to expand can be consistently solvent, you will not only have a hard time making sure the next location is functional, but you will have a harder time selling it to a franchisee in the first place.
2. The model must be replicable in order to successfully become a franchise.
Many factors go into determining whether a business is profitable or not, and unfortunately these may not be as universal or constant as one might hope. When attempting to transform an effective business model into a franchise program, doing so can require a lot of research and strategy in order to recreate the circumstances that made it productive in a new area.
3. Be mindful of the money.
There can be a great deal of numbers to crunch when developing the framework for franchising, and you should have a minimum of $75,000 to $150,000 in capital ready before you even consider acting on your model. You will need to tap into expert advice — and legal advice from franchise attorneys like Harold Kestenbaum — regularly as you navigate the complex structuring of a franchise plan.
4. Operations must be delegated properly.
A key aspect of ensuring your model will be successful is making sure the franchise is suitably managed. This entails not only choosing the right leaders in any new locations, but also possibly bringing in new personnel for both your primary business and overseeing the franchise as a whole. Your model will need to maintain self-sufficiency for every location in your chain, including your original operation, as it is not advisable to micromanage every establishment in a franchise.
5. Maintain your brand.
Above all, you have to mind your brand. Every location in your franchise represents your company and its image. The development of your franchise model should incorporate what you expect from your brand and communicate that effectively to your franchisees and your customers.
A franchise lawyer like Harold Kestenbaum is integral to much of this process and can keep you properly informed of important issues such as trademark registration and contract disputes. Check out Harold Kestenbaum’s questions and answers to franchising your business or Contact Harold Kestenbaum for a free consultation before moving forward with your franchise development model to avoid running into legal pitfalls later.