Recently Peter Thompson appeared with the forth installment on BiZ TV discussing :
Is your business ready to franchise? It could be, and our franchising guru Peter Thompson will give you the 5 fundamentals in order to ensure that your business is ready to take the leap.
Financial Resources of a Franchisor with Peter Thompson
If you think your business is ready to franchise and you believe that the franchise fees are going to fund everything needed to make a franchise sale, think again. Our franchise guru Peter Thompson says you need to have all your systems, processes and marketing material in place first, before you even approach the franchise market.
Basic Criteria #4. Financial Resources of a Franchisor
Another common misconception that would-be franchisors have is that capital will come entirely from franchisees. This perception is incorrect. Besides the three criteria discussed earlier, there will be a requirement to get your ‘franchise act’ together before attracting people to your concept. You will need to invest in planning, analysis, strict legal documentation, corporate packaging, marketing, advertising and recruitment. In addition the operating system of the business should be nailed down and form the basis for the total reproduction of the business. Eventually when candidates seek you out, enter into meaningful dialogue with you and before they are willing to invest their hard-earned money and leave their job, they will expect that you have everything set up to run this business.
Basic Criteria #5: Are you the right fit as a Franchisor?
So what do you do if you have met all the above criteria? Do you launch your business as a franchise? There are a few more questions to first ask yourself: Are you the type of person that needs to be in complete control all the time? Are you the type that cannot stand to share anything with anyone else?
If, in your mind, people are a necessity that you could do without and you dream of the day when you could clone yourself, franchising may not be your thing.
You cannot be of a dictatorial nature. You should possess the abilities to explain, demonstrate and persuade franchisees to accept your advice. The result will be informed, supportive, profitable franchisees and a revenue stream from royalties and rebates that will allow you to defer your costs and make yourself profitable.
Franchisees are partners in your business. They have invested their time and, in most cases, a lot of their own money to own a business. If you cannot accept that franchising is about relationships, sharing ideas and working together, this business model is not for you.