Is your business a good candidate for franchising?
Answered by Anthony Windress from Commonwealth Bank of Australia
Here are some must-haves:
- Proven profitability. It’s not enough just to be turning a profit – you need to have been strongly and consistently profitable across several years of trading. That’s because you need a successful track record to convince potential franchises, and because you’ll need strong cash flow to carry you through the early days of the franchise, when you may find yourself subsidising your embryonic network.
- A proven brand. While it doesn’t have to be a household name (yet), the brand should be well-defined, with a unique selling proposition that clearly differentiates it from its competitors. You also need formal protection for that brand through trademarks and patents.
- Robust systems. Systems are the heart of any franchise. They need to be comprehensive, exhaustively documented and easily taught and learned.
- Repeatable success. Your business cannot be so dependent on your individual skills and knowledge that a franchisee would find it hard to repeat your success. For that reason, strong consultancy and service businesses can be unsuitable for franchising.
- A long term vision. When you become a franchisor, you’re committing yourself to a long-term partnership with your team of franchisees. That means you need a compelling vision to inspire them and make them want to be part of your journey.
About Anthony Windress
The financial needs of your Franchise business are unique. That’s why the Commonwealth Bank offers you the specialised services of our Franchise Banking team. Our team members are industry experts who can tailor financial solutions to help you – whether you're buying a franchise or running a multi-site corporate.
You should always check independently that an ask an expert answer published on Franchise Business applies to your particular circumstances.
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