Can businesses conducted solely on the Internet be franchised?
As I have said in the past, ‘any business can be franchised, but not every business should be franchised’. In fact, short of dealing with one of the 13 registration states, creating a franchise can be accomplished in a weekend, and franchise sales can begin on Monday morning. Now, this type of offering would be complete trash, but a slick operator could pull it off and trap novice buyers with a great sales pitch. (Yes, I’m serious.) I feel that when franchising a business, the overall effort including planning, training, structuring, organizing, mentoring, and creating quality legal documents will take three-five months, and the balance of the first year to ‘grow one’s franchising legs’. That’s my approach as a franchise consultant, but even with that, I first pay a great deal of attention to franchise feasibility.
Now, to your question, the answer would be most likely ‘NO’. The reason is that the Internet allows worldwide coverage and that is precisely what a franchise is ‘not’ supposed to do. In franchising, the best situations are found when and where a franchisee serves a particular area or territory. The Internet is used in all franchised operations, but not as the basis of the operation.