4 Questions to Ask BEFORE Franchising Your Business

Paul Segreto
4 min readFeb 1


Between building a brand and the awareness that goes with it, adding additional revenue streams, and the plethora of other advantages to turning your business into a franchise, it may seem like the obvious next step for business owners that are anxious to further growth and expansion of their business.


While franchising can provide immense success, achieving better business margins and successful growth is not guaranteed.

To determine if your business is ready to be franchised, prompt an honest conversation with yourself, starting with these four questions:

1. Have you realized consistent success?

While there are no rules about the required years of experience, revenue dollars, etc. before you can franchise your business, owners should be able to demonstrate that their concept is successful enough to take on a second and third location.

Think about how you will pitch to potential franchisees when that day comes — you should be able to communicate the true value of the business and the success they can reasonably expect from buying in. You must be able to share your vision and ensure potential franchisees are able to follow through on your vision.

2. Can your success be replicated?

Realizing business success is promising, but the revenue of the company doesn’t multiply just because the number of storefronts does. If your business gets boosts from a local event or based upon customers specific to your current neighborhood, attempting to replicate that might be challenging.

However, if your operations isn’t dependent upon specific local events and you believe a new region will benefit from your business because of X, that’s a good sign that expanding will be a positive move.

Of course, if your business is extremely dependent upon you, a honest evaluation is necessary to determine how the same efforts could possibly be replicated by your franchisees. After all, a business model could be franchised but unless you’re operating within the National Football League, a person cannot be franchised.

3. Are you ready to invest in your franchisees?

In large companies, the responsibility of providing training and resources doesn’t typically fall on the owner’s shoulders. Being a new franchisor means building that support network from scratch. Providing continuous support to franchisees is an investment in not only their success, but the success of the franchise as a whole — therefore it’s a responsibility that should not be taken lightly.

Yes, even if it means you will be spending a significant amount of time with new franchisees in a training capacity. To that point, the franchisor-franchisee relationship is equal parts manager and mentor, and you need to be ready to provide the guidance and support they will seek, and without fail.

You must realize the relationship is one of interdependence much like a marriage. It’s at this juncture that you must realize you’re no longer just in the X business, but now also in the franchise business.

4. Would your own balance sheet qualify you to buy a franchise within your own franchise system?

This is really an eye-opening question that most individuals never even think about when considering to franchise their business. The bottom line is the adequate financial resources necessary to franchise your business AND sustain the ramp up period to being an organization that is able to operate successfully on the royalty stream only.

That’s correct, but maybe a better way of stressing this is to emphasize, your organization cannot rely on franchise fees to survive. Attempting to do so would be a kiss of death for your brand, and your franchisees. It cannot be stressed enough to be adequately capitalized before dipping your toe into the franchising pool.

If you’re considering franchising your business, I’ll leave you with a statement in a local publication about a recently shuttered restaurant — one of a few company-operated locations. The article shared the following from an apparent interview with the brand owner which in my mind definitely raises cause for concern:

“… he wants to begin franchising this year. Perhaps the right franchisee will feel more comfortable with the costs of operating inside the [city] than he does.”

If you’d like to learn more about franchising your business, please visit our website at Acceler8Success.com. For additional information, please reach out to me on LinkedIn or via email to Paul@Acceler8Success.com. I look forward discussing with you what proper franchising can do for your business.

Have a great day. Make it happen. Make it count!



Paul Segreto

Sharing insight and perspective for the benefit of today’s current and aspiring entrepreneurs. However, it’s not always about business!