Franchising 101: 7 Signs You're Ready to Expand Your Business as a Franchisor

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Looking to expand your business? Franchising can be a great option - if youíre ready. Today, we consider the seven signs that your business can be expanded through the franchise model.


If your business is doing really well and youíve successfully differentiated your brand within a competitive market, you might want to consider expanding. After all, franchising can be one of the quickest and most cost-effective ways to grow a business, but it's not without its challenges. Youíll most likely have to make changes to your business model, which takes time and effort, and may have an impact on the successful business that youíre attempting to franchise.

A big mistake that many entrepreneurs make is franchising their business before either they or the business are ready. So, if you want to become a franchisor and join the 48,600 franchised units in the UK, this article should help you make sure you and your business are in a suitable state. Here are the top seven signs that youíre ready to expand your business through franchising.


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1. You can clearly articulate what your brand is

If youíre to be a successful franchisor, youíre going to need more than an excellent business concept. You need to be clear about what your brand is and have outlines for operations and methods for attracting new customers. Itís important to be able to describe every aspect of your businessí branding to your employees, potential franchisees and investors.

2. Itís popular with customers

It may sound obvious, but if your products or services are popular and in high demand, thereís a great chance you will be successful at franchising.

3. It can be replicated easily

Even if your business is successful in the location you launched it in, it needs to work well in other locations throughout the town or across the UK. Therefore, you need to figure out if your business is currently thriving because of the specific location itís in or because it has a universal appeal. Businesses with a location-specific popularity are hard to replicate successfully.

A thriving industry There are 48,600 franchised units in the UK

Also, be careful not to underestimate how much value you add to the business yourself. If one of the main reasons why your business thrives is because of you and how you interact with customers, itís possible that another franchise location might not be received so well without you there. To be a lucrative franchise, each unit has to be able to tackle the daily challenges without your personal touch or guidance.

4. There are no major bottlenecks with the existing business model

Your business process should be well integrated with supply chains, customers and employee management. If you are to succeed as a franchisor, your business needs to be process oriented.

5. You have the right group of people on board

To be successful, your business strategy needs to executed well. Itís not impossible for businesses with excellent strategies to fail because they werenít executed perfectly. If you have a talented group of employees on board who truly care about the growth of your brand, youíre on the right track to franchising success. When you hire employees and later recruit franchisees, make sure they are able to take your brand forward in the direction youíve dreamed of.

Part of your role as a franchisor is delegating responsibility effectively. Every franchisee needs to be kept in the loop and operate from unified business systems. Itís incredibly difficult to build such a cohesive brand on your own. Therefore, youíll probably need to team up with multiple experts that specialise in everything from advertising and public relations to legal issues and training.


6. Your business has enough revenue

Although you can often turn to lenders for money, itís important that your business has sufficient, regular revenue. You need to make sure you can afford to survive the lean months (the time of year when your product or services arenít as practical or in demand, e.g. ice cream in winter).

Your business venture will most likely be made up of personal financial stake and investing partners. When developing your band, covering legal fees and seeking the help of experts, costs can quickly multiply. You can read more about franchise start-up costs here and here.

7. Your expectations are realistic

Most success stories emerge from entrepreneurs with big dreams and high expectations. But, if youíre not careful, your ambitious vision for expansion could result in financial ruin. As well as having strong belief in your product or service, you need to consider whether it will translate in the real world. You need to be committed to the success of your brand, put in lots of hours and not make any rushed decisions for it to work.

Is my business franchiseable?

Although, in theory, most businesses can be franchised, there are some basic standards that must be met. Your business must meet criteria set by the British Franchise Association (BFA) and should be credible, unique, teachable and provide an adequate return for franchisees.

The BFA also states that a business model must have a defined and proven method of trading for it to be considered a ďBusiness Format FranchiseĒ. Any potential franchisor must put its model to the test for at least a year, evaluating each activity, result and challenge to ensure that it can be a success.

In summaryÖ

Even if your business is ready to be franchised, you need to understand whether youíre ready to be a franchisor. Developing and running a franchise system needs a whole host of different skills compared to those needed to own and operate your own business. Itís most likely that you'll spend less time in your business and more time meeting with franchise professionals, developing marketing plans and securing finance for your new venture.

You can read more about whether you should franchise your business here.

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