Healthy and Fitness

Most startup franchisors spend the $35,000 it takes to create the required disclosure documents so they can franchise. In fact, they believe once they do this, that they can pretty much keep going, and not have that expense again. However, as a former franchisor I can tell you that it makes sense to upgrade and revisit your franchise disclosure document every two years. Why is this you ask?

Back in the late 1990s The International Franchise Association had a program where franchisors would volunteer their services in the event of a natural disaster helping those regions of the country in their time of need. Each franchisor would make a list of the things that they were able to do, such as use their fast food restaurant to feed FEMA, first responders, or firefighters. Many of these franchisors were able to do all sorts of great things using their economies of scale, supply chains, and manpower to come to the aid of victims of natural disasters.

Are you one of many who dream about being your own boss, but aren’t sure you’re prepared to start your business from ground zero? If you are, then franchising may be just the right thing for you. It’s a fantastic alternative if you’re a businessperson without much experience or resources, and could use strategic advice when starting up your business. When you buy a franchise, you buy a piece of the franchisor’s existing business, one that preferably has already established itself as a reputable brand.

After spending hours researching on the best business to start, you’ve decided that franchising is the way you want to go. But the big question is: how do you pick the best one? Many franchise businesses have failed because franchisees didn’t do their due diligence when studying the intricacies of running a franchise before signing on the dotted line.

There are four things you should consider before deciding to go the franchise way:

Before retirement, I was the founder of a franchising company. I like to think of myself as successful, and I often considered myself one of the most knowledgeable franchisors, but that’s not really saying much because there are only about 2000 – 3000 active franchisors in the country at any one time. That’s because franchisors have a failure rate in the first five years; a 5:1 ratio. That is to say all the new startup franchisors that you see in the franchising directories, only one in five will still be expanding their franchise operations after five years.

In retirement, I do a little bit of micro-consulting to help startup businesses. One of my areas of expertise happens to be franchising, because before retirement I had franchised the company that I founded. One question I get quite a bit from small business owners that have a great business model, and lots of customers is; “should I franchise my business, how do I know when I’m ready?” Well, there are a lot of things that you must have in order to make a successful franchising company.