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Do You Need to Have Multiple Locations to Franchise Your Business?

No. Having multiple locations may be helpful, but it’s not necessary and it’s not always a sign that you are ready to franchise.

What’s more important is scalability. That is, have you built out scalable systems that can be taught to franchisees and that will benefit and support franchises as they open new locations? Scalable systems are the systems, procedures, and know-how that will be needed to provide future franchisees with a competitive advantage, help them avoid mistakes, help them attract customers and profitably grow their franchised locations.

When evaluating the franchisability of your business and whether or not you have developed or are developing scalable systems to support franchisee’s, consider:

  • Unit Level Economics – What are the unit level economics of your current location or locations? What makes your business profitable and will the unit level economics you’re experiencing carry over to new franchised locations?
  • Technology – Are you using technology solutions that can be used and deployed by franchisees? The most common technology solutions that you should be using include integrated point of sale systems, inventory systems, and customer relationship management. Can you provide your franchisee’s with a technology edge?
  • Customer Attraction – Have you built out successful marketing systems (pay-per-click, social media, mailers, etc.) that can be cost-effectively replicated by franchisees and get their phones ringing?
  • Brand Development – Is your brand (trademark, logo, trade dress) developed and legally protected? Your trademarks need to be registered with the United States Patent and Trademark Office and as you expand to new locations you need to ensure that your branding is on point and ready for expansion.

The key question is whether or not your business is ready to scale and grow. Having multiple locations is a good sign of scalability but it’s no guarantee and it’s not a requirement for franchising.

What is required is scalability! Learn more about how to franchise your business.