How to Expand Your Business Though Franchising 2014 | Page 14

IS IT EASY OR
DIFFICULT
TO SELL
FRANCHISES?

A

nother question we hear often is whether or not it is
easy or difficult to sell franchises. My answer is that

selling franchises is easy, provided that you have the
right expectations and that you proceed responsibly.
And I will tell you what I am getting at here. When you are
considering franchising, you are going to sit down with your
franchise lawyer or partners, and one of the questions that
you are going to have is, “okay, we go through this whole
process, but will I be able to sell franchises, and who do I sell
them to?” And, based on my own experience, what I will tell
you is that there is a robust market of individuals who are
very much interested in buying a franchise and when you
put your franchise offering out there - and there is places to
advertise and promote your system - more often than not,
you will see significant interest. In fact, many times your
initial sales will come about organically and locally based
on interest generated in your home market, by customers,
suppliers, family and friends. Selling franchises may not
be difficult, but you do need to resist the temptation of
selling just for the sake of generating initial revenues. Your
initial franchisees will be critical to the launch and initial
success of your franchise system. You must carefully select
the franchisees that you “let into” your franchise system.
Consider the franchisees background, mind-set and working
capital. Is the franchisee interested in building a business (a
good thing) or is he or she interested in just replacing a job

9 • THE INTERNICOLA LAW FIRM, P.C.

and working “in” the business (a bad thing).
Your initial two, three, five, ten franchisees will serve as a
critical foundation for the success of your franchise system.
Franchisee success is going to be critical to your success,
and you need to insure that your franchisees have the same
mindset as you, that they have sufficient reserve capital,
and they have the right perspective and understanding
about the business they are about to purchase, invest in and
develop. You need to be willing to reject undercapitalized or
unqualified (i.e., those with the wrong “mindset”) franchisees.
You need to tell certian applicants that you will not sell them
a franchise, because I will tell you that probably more than
three quarters of the people who will want to purchase your
franchise are probably not going to be suitable candidates.
And so, the answer is, you should not have a difficult time
selling franchises but you need to have the right expectations
and be extremely cautious.You need to limit your initial
growth to a pace that is exremely controlled. If your goal is
to sell 25 franchises in the first year, then you have the wrong
expectation.
When Developing Your Franchise: One Size Does Not Fit
All
Far too many “franchise development” companies (whether
franchise lawyers or claimed franchise development