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Eight things you need to know before you start franchising your business.

I’ve been thinking of franchising my business...

Well... any business CAN be franchised, but it is NOT true that any given business SHOULD be franchised. If it has a solid history of healthy bottom lines, and it’s a unique business capable of thriving in a variety of markets, then selling a franchise will expand the size of your business as well as its profitability.

Profitability is a determining factor in the success or failure of a franchise. Potential franchise investors are interested in putting their money in a venture that offers a guaranteed return. In order to sell franchises, your business must also be credible in the eyes of prospective franchisees... efficient... professionally designed... unique in some way. These factors tend to add to profitability.

Efficiency is the key to running an effective franchise. Successfully franchised businesses have fine-tuned their operational procedures and documented them through easily-implemented operations manuals.

The advantage for the franchise investor is that he/she doesn't have to reinvent the wheel to find out what works. The advantage for you - the owner of the business being franchised - is that you sell the work you’ve invested in setting up your systems and branding but still keep some control over it.

Franchisors have two primary functions: they keep their concept up to date, and adequately train and support quality franchisees. they can leave the shopfront operations - the core business being franchised - and become involved in the business of running a franchise company. Mentorship is the name of the game. It should flow from the franchisor in the form of quality franchise consulting and out to franchisees... and if you think you can supply that vital ingredient, as well, then your business may be a good candidate for franchising.

Before you decide to venture into the world of franchising, you should probably consider opening more than one location of your business yourself. The lessons you learn along the way will give you a preview of the challenges you will encounter when you begin full-scale franchising. You will discover valuable information about the systems franchising will require and refine your operations manual. Quality control generally translates into the development of an operations manual and a well-defined training program, if these things are not in place already. Your manual should contain everything your franchisees will need to know about how to open and operate your business. You'll also want to include quality control checklists, policies, procedures and tactics that will allow these systems to be uniformly enforced—while being careful to avoid anything that creates liability.

Finally, you'll need to generate franchise prospects and develop marketing materials that will help make the sale. You'll need to incorporate your franchise message into your Web site, and since the franchise sales process is highly regulated, you'll need to be educated in proper sales, disclosure and compliance techniques.

If one of your “company stores” does well, then after two years there is no legal impediment to sale.

Multiple locations also demonstrate to potential investors that your business concept is transportable and capable of prospering in more than one location.