Just a short note today, as often I’m asked by people if I think they should franchise their business and it happened again today …

Simple answer, if someone who runs the businesshalf as well as you could do it and the business has great margins then yes.  You see franchising is brilliant if done correctly, especially for people new to owning your own business.

But, as a franchisor maybe 20% of your franchisees are going to do it as well as you did when you started the company, so don’t expect the 80% to.

As for profits, it kills me to see unproven franchise models being sold when even the original owner couldn’t make money from it.  It’s almost fraud, to me it feels like a rip off.  The model has to be proven and usually that takes at least 30 franchiseunits operating to prove.  Also the franchisor HAS to make new sales to stay profitable usually until they get about 50 to 100 franchises running where royalty keeps them strong and profitable.

The royalty fee you charge a should be covered in the economies of scale the franchisor brings with buying power and the like, so that doesn’t really matter, but the business has to be profitable …

So, overall, good margins and an easy to run and manage business are two of the things I look for in a franchise.

I am currently looking to buy more franchise companies and build them into a global entity …

All the Best, Brad Sugars