Business Opportunities Weblog

November 11, 2005 by Dane Carlson | 3 Comments

Entrepreneur:

How would a smaller, lesser-known concept know if they should franchise?

It depends on the person’s experience, but for us, what a franchisor brings to the table is his experience. One of the things a franchisee is buying, in a very soft way, is that the franchisor has made mistakes and survived it.

The franchisor understands seasonality. Companies come to us and say, “We just started and we spoke to this company in Chicago that thinks our concept is the next McDonald’s,” and we’ll say to them, “What happens in the fall when it’s back to school?” and they’ll say, “We don’t know.” If you don’t what you’re doing, if you don’t have experience, you’re guessing. But if you open a location where you’re at, open a location the next market over, two, three, four locations in different markets, run them for a year or two, and then franchise, that franchisor can answer franchisees’ questions based on experience rather than guessing. If you’re not quite certain, run your business a bit longer, because when the immature franchisor comes up against the multiunit, experienced franchisee, that franchisor can’t answer questions and is going to lose an opportunity that will never, ever present itself again.

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Tags: Franchising