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Can only large companies franchise?

Posted by Carolyn Dufton on 8 September 2008

Some of the best "franchise-able" businesses I have come across have been businesses with relatively low turnovers but high profit margins.

Some businesses I am approached by have been turning over large sums of money.

However, when we stop to have a look at some of these businesses in detail we find that their processes are extremely complex with a high level of skill/training and expertise needed.

This immediately reduces their "franchise-ability" potential.

It is often the case that some smaller turnover businesses have simple business systems that require no previous expertise, and where initial franchise training can provide the skill base needed to run the business.

Providing that the franchisee fee, royalty and any other charges reflect the turnover level, and that when a franchising feasibility study is completed there is a viable value proposition for franchisees, a business does certainly not need to be "large" to be franchised.

Summary

  • Most businesses that can be systemised and that are profitable can be franchised.
  • Ask a franchising consultant to help you assess your business's franchising "value proposition".
  • A thorough feasibility study should be undertaken to ascertain whether the business and owner are suitable for franchising.

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Author: Carolyn Dufton
About: Carolyn Dufton Dip. Bus (Franchising) heads the team as the owner and manager of franchisingplus. Carolyn has a wealth of small business experience, and many years of hands on franchising experience.
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Tags: Franchising

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