It may be quite often that you run across someone who says to you they have invented a really neat product (for example maybe this person invented a new hybrid-type of coffee bean infused with tequila) and it comes out in conversation that they want to franchise it. But is a product (in this example a new hybrid-type of coffee bean) really enough to consider franchising? Let’s take a moment to discuss if franchising a product and just a product alone makes sense.
Franchising is Not Just About a Product
When franchising a business, typically it is about more than just a product; it is about having a well-rounded business (find out more about what types of businesses can be franchised). In our example, this business owner had a new hybrid-type of coffee bean and let’s assume he/she is selling and delivering bags of this new coffee bean to other businesses in his/her area. In this example having just a coffee bean and selling it to other businesses is not really a well-rounded business. While this new coffee bean may be the star of the show, a well-rounded business typically has other elements that strengthen the entire franchise offering such as: services that are tied to the product; different ways to use the product; additional streams of revenue, etc. Not to mention a well-rounded business also has some administrative and operational elements for example: accounting; bookkeeping; advertising and marketing strategies; how to hire employees (if applicable to the business); the best layout and design for the business location (or vehicle setup if it is a mobile business); how to adhere to industry specific regulations; administrative tasks; etc.
If this business owner’s business is just about selling and delivering a product (in our example bags of the hybrid coffee bean) then it is missing some of the elements mentioned above and is not considered a very well-rounded business (check out our article to learn about the requirements to franchise). In our coffee bean example, what the business owner is really seeking is a salesperson to help get their product in the market and out to different businesses, not so much a franchisee. When someone becomes a franchisor he/she is responsible for teaching franchisees all the methods, processes, procedures, techniques and best practices of running a well-rounded business so that franchisees can successfully implement the business in their market (learn about the responsibilities of a franchisor). This entire concept is known as “business format franchising” which is further described on our website. In otherwards the format of a business, all the intricacies that make it work, are what make up a well-rounded business. The coffee bean is simply the star of the show.
A Franchise Is a Product Coupled with a Service
Now on the other hand, let’s say that this business owner had come up with different recipes for coffee drinks that use the new coffee bean. The business owner also prepares and serves the coffee drinks to customers (this does not necessarily have to be a brick and mortar location it could also be a mobile business). Maybe the business owner also adds pastries and other products to complement the coffee drinks. Now this business owner is selling the new coffee bean in all kinds of different products and more than likely will have developed a certain way of doing things (best practices). In addition to preparing and serving coffee drinks made with the new coffee bean, this business owner now has added different streams of revenue and has figured out how to efficiently run his/her business. While the coffee bean is still the star of the show, there is an entire business built around this new coffee bean and maybe even a catchy name for the business in addition to best practices; all of which now makes more of a well-rounded business (read how a catchy name is not enough to hang your hat on when it comes to franchising).
While having a product is helpful, the bottom line is that franchising a product does not make sense without a well-rounded business surrounding it. After reading this article you may now realize that somebody who is just selling and delivering a product is simply not a well-rounded enough business for franchising (more on how to determine if a business is franchisable). Without the elements of a well-rounded business, the idea of franchising just a product is equivalent to someone just buying themselves a sales position job.
A Business Built Around the Product
If you are talking with someone who has a really neat product that they invented and wants to franchise… ask them about the entire business. If it turns out they have an entire business built around their star product then please tell them about The Franchise Maker. We will gladly talk with them about their product and business to determine if what they have makes sense to franchise. Or if you happen to be a business owner and you have created a product that is the star of your business and have surrounded it with other offerings and streams of revenue call us directly at 1-877-615-5177. We will determine if franchising makes sense for your business.
- Does a Product Need to be Patented Before Franchising
- Does Franchising Make Sense for a Simple Business
- Franchising is for Business Owners Who Think Big
- Control Freaks and Franchising
- Franchising is Also About Franchisees
- Do You Want To Franchise Your Restaurant
- FAQs about Franchising
