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Congratulations on your success so far, and welcome to the community.
Your business concepts sounds as though it is adequately differentiated and market adaptable -- which are two essential criteria of a good franchise.
Two other important criteria stand out as possible challenges -- your potential backers and franchisees may not perceive that, at age 21, you have the management experience and credibility to sell this alone, or that with only a year in business, the prototype operation has been around long enough to be proven and refined to achieve maximum efficiency.
Eight criteria to consider are:
Could you teach everything about this business to a franchisee in three months or less, starting tomorrow?
Will the business remain viable and relevant in the years ahead (and are you already researching and developing the modifications you‘ll need to make in your products and services to reflect the market and technology changes that will occur over the next 8 to 10 years)?
Is every aspect of this business thoroughly documented and standardized, from policy manuals to training modules?
Will the person who is likely to be interested in buying into this franchise (and capable of running it) also be able to come up with the franchise fee you'll be asking?
Will the franchisee get at least a 20 percent ROI within the first three years?
Are you committed to building and supporting a long-term corporate relationship with franchisees?
Do you have the capital to expand via franchising? (The legal fees associated with franchising can run $100K, and it can cost $250K or more to market and sell a new franchise opportunity.)
Do you have the expertise and systems in place to support a franchised enterprise (multi-unit planning and operations, ad fund handling, lead management, etc.) -- or alternatively, do you have the additional capital to hire a franchising consultant to manage some of that for you?
Obviously, it's a big step, and those are some of the key things you'll want to consider and address as you prepare to take that step. Hope they help. Good luck!
Thank you very much for the feedback. These are all things I will consider while moving forward. One thing I have learned is that no matter how great your idea is, it will still take time to market it. I am looking to franchise in the longrun, so that is why I'm looking to get started on the essentials that you have discussed. Thanks again.
You're welcome! As you develop your current business operation (the prototype for your franchise), this "exercise" might be helpful:
Imagine that you were offered a once-in-a-lifetime opportunity to do something you'd dreamed of, but never thought possible (e.g., sail around the world, go on tour with your favorite musical act, train for an assignment aboard the international space station -- whatever turns you on). All of your expenses would be paid, but no salary. You'd leave in 90 days and be gone for two to three years. Could you take the next new person who joined this community, hand your business over to that person during the next few weeks, and then go away in January with absolute confidence that when you came back in the summer of 2011, your business would profitable and operating exactly as you expected?
Anything that keeps the answer from being "yes" is potentially something you'll want to address and implement before you make a franchise offering. Again, good luck to you!
Congratulation and good luck with your future expansions. You have a lot of work ahead of you.
If you need capital or to conserve your capital or if you franchise out and your franchisees need cash flow, you can consider factoring some of your current clients. Factoring is a term used whereby you sell invoices at a discount. So if you have invoices go out at the beginning of the month and they are due in 30 days, you sell them that day, to a factoring company, and get your money in the bank within 24 hours. New franchisees would benefit greatly from this, particularly if they have outgoing expenses to pay before they collect on their invoices, such as bank loans, leases, construction, payroll, taxes etc.
Factoring is a great short term way to utilize your cash flow, without creating a debt or owing. The fee charged is fully tax deductible as an expense on the balance sheet. Keep it in mind. I know franchise owners who fail within six months because of cash flow problems. If you would like more information, please visit my website or call me, www.assetstocashsolutions.com.
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I own a Document Management company that isn't like the few that are out there. We have specific things we can offer that others cannot. With a strong client base all who are extremely satisfied with our work, I want to look into creating franchises. I have read about the UFOC ect.... and I have been saving up capital to make the next big move. Right now I am revamping the company's look to the general public ( website / billboard adv ect ) to better prepare it to be franchised. Does anyone have any tips or information that could possibly help with doing this? My name is Travis Byers, I am 21 and own Global Scanning Solutions.. We are a little over a year old and have been very profitable. I realize that we are new, however with great sucess in such a short period of time, along with our great quality of work / new type of service in ACTUALLY creating a paperless work environment, I think it would be a great franchise. I look forward to any comments or suggestions anyone may have. I am new to this forum and haven't really read around much, but I have seen alot of people helping others. Thanks ahead of time for any useful input. I can be reached personally at firstname.lastname@example.org