How to Expand Your Business Though Franchising 2014 | Page 12

Franchising will enable
you to “monetize and leverage” the assets that you
have already built and put
these assets to work for you
through royalties and other
franchise revenue streams
that will be paid to you. If
done correctly, franchising
represents a true win-win
solution.

3

Can your
business model
be duplicated
by franchisees?
This is a big
factor. Even if
your business is a
tremendous success,

if it is overly complex and requires very specialized
skill and knowledge, this factor may mitigate against
the franchisability of your business. This does not
mean it cannot be done, just that additional focus must
be placed on franchisee systems and support.
Now, if your business can be duplicated as many are,
then it is suitable of franchising. What do I mean by
duplication? Well, will your franchisees have access
to your sources of supply? Will your franchisees have
access to production sources? Will your franchisees,
if your business requires on-site production, have the
ability to produce and replicate your products? And
if your franchise is a service-based business, are you
able to train your franchisees so they can replicate the
quality of your service? In the economy right now,
simple franchises are very popular. So service-based
businesses that offer only one or two services and
product-based businesses that offer a limited product
7 • THE INTERNICOLA LAW FIRM, P.C.

line (or access to a franchisor controlled production
source) are very popular and offer great potential.
Now, I will also tell you that complex businesses can
be franchised - if they are approached properly and
afforded the right resources. Recently, I met with a
start up franchisor, a very successful business, a very
well known brand and reputation in the restaurant
industry with a phenomenal product. One of our
concerns was how will franchisees be able to create and
replicate the food products themselves? So, initially
I viewed the business as “complex”. It had to do with
the type of food - and I expressed some concern about
“franchisee replication”. Well, for this franchisor, our
solution was that the franchisor would be developing
or using his current facility as a production facility to
supply his initial group of franchisees. By doing this
from a “franchisability” standpoint, this soon to be
franchisor really moved his potential franchise model
from questionable to solidly franchisable and what I
think will be a very good franchise system with great
growth potential.
So, if you have a complex business, consider what your
training systems are going to be. Give thought as to how
you are going to assist your franchisees in replicating the
products that you sell and the services you provide.

THE FRANCHISING BASICS