Assessing Yourself as a Franchisor Before Franchising Your Business

Making the transition from entrepreneur to the franchisor is difficult in many cases, if not impossible for some entrepreneurs.  The life of a small business owner forces many people to become cold, hardened and without feelings for others in order to survive the difficulties of entrepreneurship.

When a business transitions to a franchise company, so must the business owner.  Franchisees become the new customer and many times early on in a franchise brand are demanding of time, energy and emotions.  In our work with early-stage franchisors, it has become evident that some business owners just don’t have the velvet gloves required to work with new franchisees and maintain the delicate franchise brand. 

One early fight or lawsuit for a franchisor can greatly decrease the rate of acquisition of new franchises, where a happy franchisee who is willing to validate the model will expand franchise recruitment significantly.

My advice when considering franchise growth is first to start with a business analysis. Does your business have processes that are independent of your skill set and would allow someone else to do what you do effectively?  Not every solid franchise platform works every time for every franchisee, some of the best in the world have failures.  But you need to determine whether your business is successful largely because of you and your skill set.

A good indicator is how many people you have trained within your business and made successful as employees or independent contractors.  Some obvious traits should be in places such as financial viability of the business, market potential and a strong value proposition for your product or service.

Once you have determined your business is franchisable and does have the potential for growth in the franchise market space.  Then it’s time for the tougher look in the mirror….evaluating yourself as a potential franchisor.  I’ve worked with plenty of genius entrepreneurs who just couldn’t cut it as franchisors.

They had little patience, no ability to work with others, no interest in the success of other people and other traits that don’t play well in franchising.  That didn’t mean they couldn’t be successful as franchisors, it just meant they needed to be willing to hand over the reins to people who did have these characteristics.

A client recently hired a franchise director to take over his 57-unit franchise system and told me he couldn’t take it anymore, everyone was too demanding of his time, he hated being organized and couldn’t deal with another phone call at 9 pm from a franchisee.  My response what that it was the best move he’d made in the five years of his franchise business.

Now, with the guidance of someone who had the managerial skills, patience and willingness to do the big picture things, this franchisor looked to grow exponentially in the coming years.  In fact, since his stepping down, the system was selling 3-5 franchises per month.

Now that I’ve spent time working with more mature franchise systems, it has become evident that most larger franchise systems go through some form of an evolution where the original founder is rarely still the primary operator.  The question for you in considering whether to franchise your business is when this transition would take place.

It may be almost immediately after your first few franchises are sold that you should look to hire a capable franchise operations manager whereas in other cases you might have the aptitude to manage a much larger system before hiring support staff.  Regardless, your self-evaluation and assessment must be accurate, or you could lose the enormous potential for growing your brand through franchising.

For more information on how to Franchise Your Business, take our Quiz.