Franchising can be a great way for a growing business to increase profits and income streams. But not every small business is well-suited for this type of expansion.


Becoming a successful franchisor involves a variety of complex legal and financial considerations and a strong business plan. Before you consider launching a franchise, ask yourself the following three questions to determine if your business is a good fit.

Is Your Business Successful Enough for Franchising?

In most cases, your business must be profitable before you begin the franchising process. Sometimes, however, we find exceptions to that rule.

Investors who may be interested in becoming your franchisees seek innovative, successful concepts, but they also can recognize potential. Many franchisees prefer to buy into a thriving business, but if your concept is dynamic and well thought out, it can resonate with entrepreneurs looking for the “next big thing.”

If business is booming, you can generate a lot of excitement, even if your concept is fairly new. In today’s economy, savvy investors understand that success often means being on the cutting edge of a new concept.

Can Your Business be Replicated Through Franchising?

If you have a proven, profitable business, franchising can be extremely lucrative, as long as you ensure your concept will work equally well for others.

Franchising works well if your business model is one that can be replicated in other locations. If yours is a business that requires professional qualifications or high skill levels, you may have to include specialized training and support for franchisees.

The bottom line is this: Can someone else take your concept and put it to work in another market? Do you have a business that can be successful elsewhere? If so, franchising may be a good expansion strategy.

If not, now’s the time to start honing your concept and business model to make it easy — and profitable — for others to replicate.

Do You Have the Time and Money to Invest in Franchising?

Your business may be ready for a franchise, but are you ready?

Franchising creates a separate business, apart from the business you are seeking to franchise. This new business will require time, effort and some level of investment on your part. But, depending on how you structure your franchise agreement, the franchisees will likely be responsible for scouting locations, securing financing, and hiring and training staff, and your commitment to the process will level off.

After creating all your required franchise documents, you may find that your main challenge will be to find the right franchisees, those who fit your brand and who will uphold the standards of your concept. This may change over time, but it is important to have a concept of your ideal franchisee from the beginning.

Franchising is typically less expensive than opening multiple company-owned locations. It also poses less risk and more opportunities for profitability. But becoming a franchisor is not without difficulties and risks, and will require some level of investment on your part.

To achieve success as a franchisor, you will need to work closely with an experienced franchise attorney. Creating the right legal framework for launching your franchise will protect your interests, reduce potential disputes with franchisees and ensure your continued success.

The Franchise & Business Law Group, serving the greater Salt Lake City area, is Utah’s premier legal specialist in business and franchise law. Contact us today to schedule a consultation to discuss your business concept, and discover your potential for expanding your company through the franchising process.