How To Sell Your Franchise For The First Time
Once you have built a durable business with a strong brand, a business that has the trust and loyalty of its consumers, and whose products and services are seen as having no close substitute, you have the basis for a successful franchise. Selling a franchise demands that you convince someone to believe in your business and its potential and appeal to customers. Given that all you have at first is the success of the initial business, you have to be able to demonstrate that the business’ brand and/or business model can attract customers in different locations. In this article, we will discuss how to sell your franchise for the first time.
Stick Close to Home
The first thing to do is to keep your first franchise as close to your corporate headquarters as possible. The primary reason for this is that this allows you to monitor the franchise and ensure that it operates as close to your values, and business model as possible. You will have to be as hands on as possible when you sell your franchise for the first time. You should be able to hop into your car and drive to your franchise location without taking too much time on the road. This is the approach that Biscuit Belly, and Franchise Captain have used to successfully grow their franchises. Distance might make the heart grow fonder but it also makes it much harder to manage a franchise. In the least, your franchise has to be within the same region in order to maximize your chances of successfully managing it.
Another reason for this is that by sticking close to home, you are able to leverage the brand recognition of your core business in order to attract customers to the new franchise. By sticking close to home, you will have more people who have heard of your core business and can be driven to your new franchise.
Open Test Locations First
Take a scientific approach to the problem and test your hypothesis that there is an appetite for your brand by opening one or even two test locations. This is obviously an expensive experiment but if your hypothesis is right, you will dramatically improve your odds of selling your franchise. There will be clear evidence that there is demand for your brand. For instance, the dog grooming brand, Scenthoud, opened in 2013 in Florida in a single location. When the owners decided to create a franchise from the business, they opened four locations across the Southeast, one of which was a test location. Now they have 29 locations in three states.
Now, not every business has the capital to conduct such an expensive test. Another option is to open new stores which, if successful, you will then sell to franchisees. This way, you build the business and simply hand the keys to a franchisee, who has ample evidence that the franchise can be a success. Brands like dermani Medspa Franchising have been able to leverage the success of their business to attract franchisees on the strength of their business model.