How to Franchise a Business Idea for Industry Success

It is vitally important to know how to franchise a business idea to ensure steady business and long-term customers relationships. Franchising is a type of agreement that reproduces a successful business model across multiple locations. Franchising is a contractual business model or relationship whereby an established brand, known as the ‘franchisor,’ allows an independent business owner, the ‘franchisee’, to use its branding, business model, and other intellectual property. In return, the franchisee agrees to pay an upfront franchise fee, and ongoing royalties to the franchisor. In this way the franchisee enjoys low risk and a support system, and the franchisor enjoys expanding their business idea.

The franchisee is instantly propelled into the consciousness of consumers who are already familiar with the brand. Due to franchising being a scalable process, franchisors growth strategies should be based on a five-year strategy for success. One of the key indicators that it is the right time to franchise your business is knowing whether or not you are ready to commit to its growth over time.

One of the most important questions to ask yourself is whether you have access to the financial resources necessary to invest in a franchise. The investment goes into start-up costs, training for employees, supplies, and other expenses.

The first step to turning a business into a franchise is understanding that a franchisor is the original business, and it sells the right to use its name and concept to the franchisee. The franchisee buys this right to sell the franchisor’s goods or services under an existing business model and trademark. Turning the business into a franchise is very lucrative avenue in South Africa, as it allows for business expansion of an increased scale, better market penetration, simpler management, and decreased costs

Franchise Administration can assist with developing the necessary franchise documentation and provide professional advisory services, to propel your business idea in the industry.

For queries on how to effectively franchise a business idea – Contact the Franchise Administration team today