When you have a business your goal is to have maximum growth each year. You want your business to be profitable and have room to improve. When you are at a standstill with your business and are looking for new ways to help it grow, it may be time to think about franchising it.
What Is Franchise Development?
Franchise development is a way to expand your business into new markets. You essentially allow someone else to use the business plan and the fundamentals of your business. It is a legal process that gives them the right to use the likeness of your business and everything that falls underneath. The best part is that they pay you. You receive an upfront payment in the form of a franchise fee and royalties for every year that they franchise the business from you.
When creating a franchise development plan you want to be sure that you are legally protected and paid accordingly. You will have to take the proper steps to have everything go as smoothly as possible. You will want to make a franchise business plan that lays out the fees, royalty payments, and any other funds to be collected. You will want the business plan to also include any information that can be used such as logo, name, slogan, and recipes. This is all legally binding so be sure to hire a lawyer to guide you through the process.
Why Should I Consider Franchising
When you are considering franchising your restaurant you will want to take into consideration the perks of doing so. There are multiple reasons why franchising may benefit you and your business such as:
When you franchise your business, you will earn passive income. Passive income is money earned without you needing to oversee it. You don’t have to manage the franchise. The management responsibilities are upheld by the person who franchises the business from you. They are the boss of their location. You simply let the royalties roll in, and you can have a lighter workload.
Rapid Business Growth
The more people you have to franchise your business, the quicker your business will grow. You become the big fish in local markets almost immediately when you have multiple locations. With passive income, you earn more capital to grow your business even further. Not having to oversee each franchise is great for keeping your hands free to participate in other business ventures.
Higher Employee Retention
When you hire managers, they can take a long time to train. You put a lot into your managers to create perfection. But oftentimes managers move on to other jobs or decide to go into other professions. Managers are hard to keep, it is just the way it is. But when the manager is also the owner, they are far more likely to stick around. Being an employee doesn’t really give you any skin in the game the way owning a business does. When you have money on the line you are more likely to want to succeed. It is also nice that most managers who own the business hire people who they trust to work with them. They create a crew of family and friends that make the location’s atmosphere more enjoyable.
When you have a franchise you don’t have as much risk involved. Like we said before, most business owners are in it for the long haul. They want to run the business in a way that is profitable and a great place to be. They already have all of the fundamentals laid out before them from your original business model, so the risk of failure drops. Plus, if they do fail, legally that is their responsibility, not yours.
Things To Consider
Before you decide whether or not you should franchise your restaurant, you should take a few things into consideration. You want your franchises to be as good or better than your original establishment. A franchise is essentially a branch of yourself, and you want it to represent you well. Be sure to ask questions to potential clients that make sure that they are ready for such a big venture.
Restaurant franchising is not a simple task, you should ask buyers what previous experience they have with restaurants. Find out if they are willing to put in the time needed to make the business successful. Remind them how much time actually goes into running a successful business.
You also want to make sure that everything about the business is put into writing. There may be things that you do with your business that are just commonalities to you. You do them because you know that is how you want it done. But if it is not in writing, then the new owner may not understand that is how it’s done.
This could become a big issue with the brand if your customers are expecting something done a certain way. For example, if you own an ice cream shop and set the freezers 5 degrees below freezing to keep the ice cream colder than other competitors, you need the new franchise to know that. People want consistency with the things and brands that they love.
Who To Hire When You Are Ready To Franchise
With all the above information you may be interested in franchising your business. You are ready for passive income, stronger brand awareness, and larger growth. This all sounds great, but you don’t know where to start. If that is where you stand, we are here to help. We are MBB Management, we can help you when you are ready to franchise your restaurant.
MBB Management offers custom franchise consultation services that will assist in guiding you to maximum growth. We assist with franchise development, support, and training. Our experienced team of experts is knowledgeable in brand creation and will gladly assist you in your next step of development.