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Should I Franchise My Illinois Business?

Posted on in Business Structure

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If your business is growing more and more successful by the day, you may be thinking about franchising. The benefits of franchising your business can be enormous, but franchising before you are ready can be disastrous. It can be hard to know whether now is the right time to expand your business. As with any business-related decision, the decision to franchise should not be taken lightly. You will need to take an honest look at your business’s strengths and weaknesses as well as your own ambitions and personal goals before you can know whether franchising is right for you.

Is Your Business Replicable?

Franchising can be a great way to expand your company without needing a large capital investment. However, not just any business is able to be successfully franchised. Is your business unique enough to be marketable?  Do you have a sustainable competitive advantage? Even more importantly, how replicable is your business? If the success your business has enjoyed so far is the result of a smart business model and unique, in-demand products and services, you may be able to replicate this success in a second location. However, if the business’s success is the result of its current location or your own dedication to 15-hour workdays, you may not be able to duplicate the success in a franchise location. Keep in mind, a franchise location must be lucrative enough to pay royalties and still leave the franchisee with a decent profit.

How Involved Are You in Day-to-Day Operations?

Another key question to ask yourself when considering franchising is what you want your own role to be in your business. If you are the type of business owner who likes to personally open and close shop every day, how willing are you to take a step back from daily operations in favor of a management position? Being a franchisor will involve a great deal of time and energy. There may simply not be enough time in the day for you to continue having a high level of day-to-day involvement in the original location while also managing franchise locations. On the other hand, if you have a staff with the leadership skills and business knowhow to run things in your absence, you may have the freedom to take on the responsibilities of being a franchisor.

Contact an Illinois Business Lawyer

At Stock, Carlson & Duff LLC, each of our skilled Wheaton business law attorneys have more than 40 years of legal experience. Whether you need help with franchising your business, buying or selling a business, creating an effective employee contract, or other business law needs, we will provide legal guidance you can depend upon. Call our office today at 630-665-2500 today and schedule a confidential consultation to learn how we can assist you.

Sources:

https://www.entrepreneur.com/article/71886
https://www.forbes.com/sites/stevenbeagelman/2019/03/28/how-and-when-to-franchise-your-business/
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