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How to Prepare a Concept for Franchising: Duplicating Your Concept

Question:

I have been reading with interest the series in the Michigan Restaurateur on how to prepare a concept for franchising. What else should I consider before I franchise my concept?

Answer:

In December, we focused on brand development and what makes a brand unique. In February, we discussed systems development, emphasizing the need to have detailed and well-documented systems that provide value to your franchisees – value that’s extensive enough to convince franchisees to purchase a franchise from you rather than develop a competing concept. Then in April, we explored the operations and unit economics of your business model, because nothing will make your franchisees happier than being financially successful. This month, we will focus on the benefits of duplicating your concept in different markets and locations prior to your venture into franchising.

Aside from a strong brand, a detailed and documented system and excellent economics, prospective franchisees will want to see that your concept is easily duplicated, and that you have successfully duplicated your concept in different markets. Of course, in your franchise sales process you will demonstrate that your concept has a strong brand, well documented systems and has strong unit economics. Demonstrating to a prospective franchisee that you understand these crucial elements is, of course, valuable. However, actually duplicating your concept in different locations and geographic markets – and being financially successful in those locations – is of greater value to your prospective franchisees. That’s because successful duplication validates your knowledge and understanding of your brand and concept. It also validates your ability to effectively research markets.

What you learn in the process of starting a new unit in a new market with new employees and new managers and working the unit to profitable performance – all that will be invaluable to the process of developing a franchise system. You learn more about your brand. You learn more about your systems. And you learn more about your operations and unit economics. This experience gives you credibility to your franchisees as they struggle to move their unit to profitability. And this gives you the real world experience, enabling you to offer credible advice to your franchisees – another added value of your system.

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