Small business owners are typically opportunistic, hard-working individuals who put their hearts and souls into their companies. However, achieving a work-life balance and being able to expand your business at the same time can feel impossible in today’s highly competitive business world.
Converting a business to a franchise allows many entrepreneurs the freedom to live their lives the way they want and expand their businesses with a proven and successful franchisor. This article discusses conversion franchising, why franchises are attractive to existing business owners, and which critical steps are most important for a successful and stress-free conversion.
What is a Conversion Franchise?
Simply put, converting to a franchise is when you enter an agreement with an existing franchising company and your business becomes part of that franchise brand.
In effect, you combine your talent, team, experience, reputation, and customers with the franchise’s brand, resources, training, and support for a synergized enterprise that blends your personal touch with established business methods.
Why Franchises Are Attractive to Business Owners
Franchises are attractive to business owners because of their size, resources, brand reputation, and proven track record as well as additional reasons you might not have considered.
The Growth Potential
A business is a vibrant, living entity designed to grow. Many small business owners started as solo-entrepreneurs who realized their dream of business ownership, but the time commitment and effort put into establishing, running and expanding the business didn’t always feel like it was rewarded with business growth. The right franchising company will have years of experience helping the brand’s business owners with tools and guidance for growth.
Conversion franchising can provide business owners with the opportunity to expand their operations more rapidly. With the backing of a franchisor, securing financing, finding new locations, and replicating success become more feasible. Owners who take the opportunity to transition their small business to a conversion franchise get to tap into this experience and gain access to growth opportunities while opening possibilities of maintaining a more healthy work-life balance.
The Power of Branding
If you convert your business into a franchise, you’ll adopt a nationally recognized brand with proven marketing expertise and an impressive reputation. This gives you the ability to attract new and different customers and reach untapped markets to provide your valued services without having to work as hard to establish credibility and reputation on your own. In effect, you get to borrow from the success of the franchise and other owners to combine with the success you’ve achieved on your own.
The combination of past success, proven methods, name recognition, marketing savvy, and established networks that franchises provide – locally, nationally, and even globally (online) – opens a world of opportunity to independent small businesses, breaking down limitations and obstacles they often face.
The Training and Support
One of the most appealing aspects of joining a franchise is that you are no longer alone. Instead, you are part of a network of franchisees that allows for extra support, mentoring, and training available to you as needed.
Franchisees receive extensive training and ongoing support from the franchisor.
This can include initial training for the business owner and their staff as well as continuous education on best practices, leadership, new products, and market trends.
Support also often covers marketing, technology, and operations, helping franchisees stay competitive. Some of these new tools, practices and processes may amplify your teams’ efforts and provide opportunities for exponential growth that wasn’t previously possible without the franchisor’s know-how.
The Established Business Model
As part of franchise support, you’ll have a business model that can work — because it’s already working across the country – and often has been for decades. This includes everything from operational procedures and systems, along with marketing strategies to supply chain management and customer service protocols. With this business model, you can streamline your operations, find opportunities for additional revenue streams, and employ changes that make a difference.
How It Works: Converting a Business to a Franchise
Business conversions can be either complicated and confusing or efficient and effective. One of the most important factors in determining a successful transition is following sound, strategic steps that give you the best chance at a swift and complete transition. Here are some important considerations:
Find Your “Best Fit” Franchise Company and Brand
If your small business is in the home services industry, you'll want a franchise partner who is in the same industry. Of course, to find the “best fit” for your conversion franchise, you’ll need to do a bit of research to determine common goals, motivations, and short-term/long-term vision. Talking to franchise owners is a great way to find out what it's like to convert your business.
Review and Sign Franchise Documents
Once you’ve chosen your franchise company, it’s time to see how they view you as a potential prospect for a business conversion. A reputable franchise company will only offer to do business with you if the territory is available and if they consider you and your existing business as a mutually beneficial opportunity. Next, you’ll be given various documents and disclosures to review. If you aren’t familiar with this type of paperwork, it’s a good idea to review common franchising terms so you’ll know what to expect.
Training and Support for Your Conversion Franchise
After you’ve dotted your i’s and crossed the t’s on all necessary franchise documents and funded your new investment, it’s time for the all-important training and transition period. This is an exciting time where the franchise company will help you take your first steps as a franchisee. This is also when you will build critical relationships and merge business operations and principles with your new franchise partner. Take the time to grow steadily and surely at this stage and avoid rushing too quickly as you coordinate new visions and goals with your expanded team.
Is Converting Your Business to a Franchise the Right Move for You?
Converting to a franchise isn’t for every business owner. You’ll need to be ready to learn and grow, as well as adapt to the established business model of the franchisor. This is where those who have done it successfully in the past can be of great help.
To see if converting your business to a franchise is a good move for you, download the free guide, Recession Planning Your Future, or call Neighborly® today to learn about small business franchise conversion and how to combine your talent and resources with those already excelling in your industry.
