By Steve Lee, Managing Director, The Franchise Consultant | bfa Advisor Member
One of the most common calls we take at The Franchise Consultant starts the same way: a business owner has had a good few years, the model is working, and someone, often a customer or a member of staff, has said ‘you should franchise this’. So they pick up the phone to us.
That call almost always goes one of two ways. Either the business is well-positioned and we can start building something together, or we have an honest conversation about why now is not the right time, and what would need to change before it is.
In my experience working in franchising, I have learned that the businesses which succeed as franchises share certain characteristics from the start. Those that struggle usually have gaps in one or more of the same areas. So before we talk packages or timescales with any prospective client, we ask five questions.
1. Is the business model genuinely proven?
A good product or service is not the same as a proven business model. To franchise successfully, you need to have operated the model long enough to know your numbers, understand your margins, and be able to say with confidence that it works. There is no fixed rule on how long ‘long enough’ is, but in most cases we want to see at least two years of trading with consistent results. A business that has had one exceptional year is not the same as one that has demonstrated repeatable performance.
2. Can someone else replicate it?
This is the question that catches many business owners by surprise. Your business may be thriving partly because of you, your relationships, your reputation, or your specific skill set. If that is the case, the model may not be replicable without you in the room. A franchiseable business has systems and processes that can be documented, taught, and followed by someone who has never worked in your industry before. If you cannot picture a capable newcomer running your business from a manual, there is more work to do first.
3. Is there sufficient market demand across multiple locations?
A franchise network requires franchisees in different territories, and that means your product or service needs to have demand beyond your current geography. We look at whether the business serves a broad enough market, whether demand is consistent or seasonal, and whether there are enough viable territories across the UK to build a meaningful network. A hyper-local business with a loyal following in one town is not automatically a national franchise opportunity.
4. Is there enough margin to support a franchise fee and ongoing royalty?
Franchisees pay an upfront franchise fee and, in most cases, an ongoing management service fee to the franchisor. For a franchise to be attractive, the franchisee needs to be able to earn a good living and still make those payments comfortably. If the margins in your business are tight, franchising can actually make the model harder to sustain, not easier. We look at the economics carefully before recommending a fee structure.
5. Are you ready to become a franchisor?
This one is often underestimated. Becoming a franchisor means taking on a new role alongside running your existing business. You become responsible for the success of other people’s businesses. You need to support them, train them, uphold standards, and manage relationships across a growing network. It is genuinely rewarding, but it is also a significant commitment. The business owners who thrive as franchisors are those who go in with a clear understanding of what that responsibility involves.
What happens if the answer to some of these is ‘not yet’?
In our view, that is exactly the right time to talk to us. We work with business owners at different stages of readiness, and part of our role is to help identify what needs to be in place before franchising makes sense. A conversation costs nothing, and an honest assessment at this stage saves a great deal of time and money later.
If you answered yes to most of the above, there is a reasonable chance your business has genuine franchise potential. The next step is a free, no-obligation assessment with our team, where we will give you a frank view of where you stand and what franchising would realistically involve for your specific business.
Book your free franchise assessment — no obligation, no pressure. Contact The Franchise Consultant today.
Steve Lee is Managing Director of The Franchise Consultant, a bfa Advisor Member franchise consultancy. He is the author of Bought In, a guide to buying and building a franchise business.