Franchising a Business: Doing a Franchise Feasibility Study
When franchising a business, which aspects of a business should you look at when doing a franchise feasibility study?
Franchise feasibility is sadly overlooked, or, at a minimum, it is given short shrift by business owners and consultants alike, because once a person focuses on franchising a business, they do not want to hear the negatives.
The critical issue is whether the business has repeatable, sustainable, and proven "systems" in place. Over the years, many people have approached me with an idea they have that they would like to franchise, but an "idea" should not be considered for franchising.
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Also, the relevance of the concept must be timely and well received by a large audience or group of patrons. If a business is popular due to a particular location, or if it is popular due to the owner's personality and cannot be sustained under the ownership and/or management of others, it is also not a good candidate for franchising.
And, of course, the business must make sense financially to the buyer once royalty fees, advertising fees, and other costs associated with a franchise operation are calculated.
The common trap that many fall into is the belief that "any business can be franchised," while it is even more true to state that "not all businesses should be franchised."
So, bottom line: An honest feasibility study may be the most important step in the franchising process.
RELATED: Important Factors to Consider Before Franchising Your Business
About the Author:
Nick Bibby, franchise consultant, is principal of the Bibby Group, an international consulting firm focused on the development of franchise systems, as well as due diligence services for prospective franchisees. He is a court-accepted franchise expert who has worked in, studied, and written about the franchise industry for over 25 years.
