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Not every business can or should start a franchise program. Developing a successful franchise may not always be feasible.

In some instances, a business may generate good returns but, after deducting the franchisor’s royalty, that return may be inadequate in the eyes of prospective franchisees.  In other instances, a business may be successful for reasons that may be difficult to duplicate. And, of course, in order to be franchisable, a business will need to sell franchises.

Even if a business can be franchised, it does not mean that it should be franchised.  An assessment of the franchise option should properly account for how franchising fits the needs of ownership or shareholders. It should also take into account whether or not there are other alternatives that should be considered.

Options such as the following should also be considered:
  • Company-owned growth.
  • Licensing or Business Opportunities.
  • Dealer Networks.
  • Distributorships.
  • Direct or internet distribution.
  • Agency relationships.

Ofcourse, the best solution for your company may be a combination of two or more of these strategies. And, in fact, most franchisors will also grow through other channels of distribution as well.

For companies that are interested in pursuing franchising, we encourage you to speak with one of our consultants. Our consultants will provide you with a preliminary assessment of your franchisability and, if merited, schedule a no-cost consultation to go into greater detail on issues such as:

  • Is your business franchisable?
  • Is franchising your best strategy?
  • If not, what is the best strategy?
  • What is involved in implementing that strategy?
  • How long will it take to implement and what will it cost?

For companies with more complex distribution issues, a more formal feasibility study may be the best solution. Especially where franchising is being used to replace or supplement an existing channel of distribution, such a feasibility study can be essential.

Some of the questions these studies address include:
  • How will franchising fit within an existing organization and is it the best option?
  • What will be done (if anything) with existing channels of distribution?
  • Can and should some of the existing channels be converted to franchising?
  • How do you best manage channel conflict?
  • Will franchising be accepted within the corporate culture?
  • How can existing resources best be leveraged?
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