Editor’s Note: This article was kindly shared with us by Bill McPherson, the vice president of retail network development for PostNet, a global leader in high-quality printing and shipping solutions, and AlphaGraphics, a leading franchisor of printing and marketing solutions. With over 29 years of franchise leadership, Bill has led franchise development and real estate for B2B, B2C, retail, and in-home senior care concepts. For more information, visit the AlphaGraphics website here.
When a new business owner first starts out, the thought that they may want to sell their business some day is the furthest thing from their mind.
But having an exit strategy and a plan to sell your business is a vital component of any entrepreneur’s roadmap to success.
While it is true that some companies become local landmarks and take on a life of their own, most independent businesses require a strong marketing plan, investments in new technology and a modern operational strategy to grow well enough to create generational wealth.
One of the ways that a locally-owned business can continue to scale their company and become attractive to potential investors is to consider converting it to a franchise.
Benefits of Converting to a Franchise
As a business owner, you have become acclimated to the operation plans, marketing strategies and vendor relationships you currently have. But you may have noticed that your business has become stagnant and harder to grow.
By converting your business into a successful franchise program, you have the benefit of operating under the processes, marketing strategy and technological innovation that have made that franchise a success.
Some advantages include:
Advanced economies of scale: A franchise is a larger institution with an established business model that has allowed it to use its size and reach to work more efficiently and spread its costs out over its network. Franchisees who follow this model have the potential to dramatically increase their sales and earnings.
Increased purchasing power: As a result of its size, a franchise is able to negotiate better prices for supplies and other products, which helps owners save money on overhead costs.
A more complex marketing plan: Franchisors have much larger marketing budgets and can provide their franchisees with advice and assistance on promotions and advertising campaigns. Their shared marketing strategy benefits all their franchisees because they are able to increase brand awareness and attract more customers.
Brand recognition: Consumers like to shop at places they “know.” Larger franchise marketing budgets allow for bigger advertising campaigns and can provide the brand with the visibility it needs to be recognized in any market. Instant brand recognition is a competitive advantage that few mom-and-pop stores can create on their own.
Access to technology: Innovation in the modern world is always evolving. Small business owners can find it difficult to afford new technology or keep up with the technological advancements that could give them a competitive advantage. A larger franchisor can afford to stay up-to-date with new technology and many even develop industry-specific technologies on their own.
Find the Right Franchise
Finding the right franchise network to join can be a difficult process.
You may have considered the business value of joining a franchise group, but you also need to consider how its culture aligns with your own belief system. Joining a franchise is a lot like a marriage. The franchisor-franchisee dynamic has to be mutually beneficial in order to succeed. Not only should the franchisor’s culture align with your values, you should also consider if the franchisor is strong in areas where you are weak and if their business plan is one you would be comfortable in adopting.
That is where a franchise coach, such as the team at FranCoach can come into play. Franchise coaches have inside knowledge of numerous different franchise systems and can help you sketch your priorities and goals in order to find the perfect match.
When to Exit
Even if you are not considering selling your business now, having an exit strategy is an important part of entrepreneurship. Your plan will be markedly different if you are planning to sell in the next three to five years versus 20 to 25 years.
Generally speaking, converting your small business to a known franchise brand drives sales and provides you with a successful business model. The consistency and quality of a franchise brand mean that your business will be more attractive on the market than many of its independent counterparts.
And, if you are considering passing the business down to other family members, most franchisors have legacy transfer programs that can make the transition easier.
It can be hard to go it alone. But having built-in mentors and access to the latest industry-related technologies and successful business models can make your exit strategy easier and more lucrative.
Do You Want to Become a Franchise Owner?
Whether or not you are already a small business owner, it is possible to own a franchise – and likely much more attainable than you may have imagined. Finding the right franchise to own is an incredibly individualized and personalized process – so it is important to explore your options and conduct thorough research as you consider becoming a franchise owner. At FranCoach, we are here to help!
FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We have partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
When we work with clients, our number one goal is to help them find the absolute best franchise for them to own. If you are looking to start a business, build a lasting legacy, make an impact in your community, and be your own boss, franchise ownership might just be the ideal path for you.
Reach out to us to learn more about becoming a franchise owner. There is never any fee for our service, so why not take the first step today toward your better tomorrow?
Find out if you’re ready for franchise ownership with this five-minute assessment quiz.
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