Business Owner: Why Sell a Franchise?

First question to ask yourself if you are thinking of franchising your business:

If you have a successful business, it’s easy to think it can be franchised. But why should someone pay for the company name and your expertise when they can probably duplicate the same entity at no additional franchising cost?

You cannot successfully franchise your operation if:

1) It is easily duplicated or entered into by a competitor.

2) You don’t have a highly recognized brand name.

3) You don’t have special management expertise to offer.

4) It’s hard to service or manage operations, from your end.

You must realize, too, that the usual upfront fees and the royalty you take on sales, that cover whatever management training and materials you may offer, will probably represent about half a franchisee’s net earnings.

That fact is bound to eventually infuriate him, assuming he becomes successful. There is no telling what the fury may be if he fails after investing in your advice.

So they may eventually cheat you or form groups with other franchisees you may have, to sue you over contract terms.

Question: If you want to franchise your business, can you finance them  as well to keep franchisees?  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)