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3 Warning Signs You May NOT Be Ready to Franchise Your Business

Since Franchise Funding Group’s spotlight in the March 2016 edition of Entrepreneur Magazine, the number of funding applications we have received has skyrocketed and we are working hard to evaluate as many funding requests as we can! Although we’re still trying to catch up, we’ve encountered three prevalent warning signs that your business may NOT be ready to franchise. We wanted to share those signs with you in this blog so you can address the issues before pursuing your dream of expanding your business as a franchise system, with our without us.

#1: Your business is not profitable and successful now on a small scale

If your business isn’t profitable on a small scale, it will be immensely unprofitable on a large scale. If you have broken systems or issues on a small scale, you’ll have those same issues magnified on a larger scale as a franchise. You need to work out all those issues and kinks and have a consistently profitable company with a track record of success. The goal is to get your model to be a replicable, profitable, proven, and cash-flowing business that franchisees can invest in with confidence.

#2: Your business is lacking proven and documented marketing and operating systems

If you’re going to get other would-be entrepreneurs to invest in your business and buy a franchise, you have to have operations and marketing systems in place. If you have not captured your “operational success recipe” in writing…you are missing the critical components of who we are, what we do, and how we do it. All of this cannot be in your has to be down in writing for the new owner to learn and to train their employees.

In addition to an operations manual, you also need a proven and effective marketing system to help your franchisee attract and acquire profitable customers on a cost-effective basis. People do not want to buy into a typical job – they want to buy a well-organized and systematized business that works well, runs well, attracts customers, and spits out cash.

If you’re at the center of your business (Chief Everything Officer) and you don’t have systems in place, you aren’t ready to franchise. You can’t be the lynchpin of each franchise location and ultimate problem solver and you can’t be on-site at all times to fix every problem franchisees run into. Your proven systems must be the solution.

#3: Your business is not appealing enough now for hundreds or thousands of people to own and run in their community…

Though profitable to you, if may not be profitable enough to others to pay a franchise fee and on-going royalties. Your business MUST have a competitive advantage and unique value propositions…it must be unique to flourish.

Your business may not be in a good and growing industry or it may not be different, special, or fun for others to own and operate. It may not be a business and industry franchise owners would be proud to tell their family, friends and neighbors they own. You may love what you do, but realistically, will others?

It may lack real sizzle and credibility...there may not be a track record of financial success. And, maybe nobody is asking you now to let them franchise or license what you are currently doing…lack of unsolicited “let me franchise this” offers may be a warning sign.

However, if your business is in great shape and you have the grit and passion to turn your successful and profitable small business into a booming franchise, but you lack the experience and investment to accelerate that growth on your own, we’d encourage you to submit an application to The Franchise Funding Group. We are not consultants and we don’t charge fees – we are an experienced group of investors and strategic partners committed to helping small business owners grow great franchise systems. The application is online here:!request-funding/c3g8.

Already an existing franchise system? We can help you too. In 10-15 percent of the applications we receive, the business is already a franchise. Typically they are small and emerging franchise systems (under 15 franchise locations) that are having a hard time accelerating their growth and are asking us for our franchise marketing, selling, and supporting expertise. They just need additional expertise and firepower. You are welcome to apply as well.

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