21 August 2014
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Franchise Prototype Considerations

To consider franchising you must have a profitable operating prototype. This model may be the principal business or a version designed for franchising.

 A business may be considered easier to operate and more profitable if some of the marginal products or services are eliminated.  It may also be best to reduce the size and choose a different location.

 The longer that you have been established the greater your credibility, but this is not a critical factor.  Whatever stage your business is in, you will not be able to sell franchises until it is generating a positive cash flow.  The business has to show that it works and makes money.

 The prototype also needs to be lean and mean. Before franchising you must examine the operations for weak spots. Much like a pinhole in a balloon that become large as it inflates, expansion will expose the weaknesses in your operation.

 If you wait until you start franchising to fix the problems, it might be too late.

 Every franchise company has two operating systems. One is the franchise system, encompassing all of the elements necessary for creating and operating a franchise.

 The second is the unit operating system, one that every business will do well to follow whether or not it franchises. This system begins with effective procedures for establishing the business and operating on a day-to-day basis.

 Selecting the right location or market, having an effective marketing and sales strategy, employing capable people, and training them properly is part of an solid system.

 It also includes quality control, good products, the right environment, buying processes, pricing, maintenance, capital, etc.

 One important aspect to remember is that you want to achieve consistency in all of these activities. A system that works one way this week and then another next week is not a system; it is a recipe for disaster.

 If you are a business owner that likes to make it up as you go (winging it), even if it is successful, it is probably not ready for franchising.

 Interested in learning more about franchising? Download the free e-book “Franchising Your Business” http://francorp.com/about-us/download-free-ebooks/ and take the franchise quiz today! For immediate assistance call 800-FRANCHISE (800-372-6244).

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