Tips for franchisors

Before deciding whether to franchise your business, it is important to consider whether or not the following requirements can be met:

1. Credibility and a proven concept

The franchising concept needs to be proven. The business must have a good track record and an experienced management team.

2. Profitability

The franchisor and franchisee should expect to turn a reasonable profit. The franchisor should receive a return on investment in terms of development costs. The franchisee should receive a return on the investment of setting up an individual outlet.

3. Uniqueness

The business to be franchised needs to have a unique selling point that will allow it to differentiate its products or services from those of its competitors.

4. Sustainable and growing demand

The franchisor needs to ensure that demand exists in different areas, and that the product has staying power. The market for the product or service should be growing and the demand must be sustainable.

5. Intellectual property and systems

The business needs to have a set of systems, procedures, expertise, skills and know-how that optimises every operational step.

6. Transfer of skills

It must be possible to train prospective franchisees lacking experience in the sector within a reasonable period.

7. Support infrastructure must be in place

The franchisor must provide intensive initial and on-going support to franchisees. This requires manpower, facilities, a verifiable set of skills and absolute dedication to the creation of win/win outcomes.

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