Build out: how to turn your small business into an expanding franchise.

• Author: Lewis, Di
• Position: EntrepreneurEdge

At some point many small business owners have to make a decision: to franchise or not to franchise.

But its never quite that simple. A lot goes into making that decision. The owner has to know the business and understand if it's a franchisable concept. Even if it is, some owners try to jump into franchising too early. And with the first two pieces in place, there are still plenty of details that go into creating a successful franchise.

Building on Success

To even consider starting a franchise, the business must be something that's not only reproducible, but already doing well, says Brad Smith, general counsel at Franchise Foundry in Orem.

However, having one booming business is not usually enough to take the leap into franchising, Smith says. "If you have a pizza restaurant, then No. 1 is that il needs to be making money; it needs to be making money, it needs to be a successful model. And it can't be a standalone joint on the corner because there could be several factors to vour success"

Having more than one location doing well shows that it's not just a good location, it's probably a good idea. While it's not necessary that the business has already been duplicated, Smith says its very helpful because it paves the way for duplicating the business when franchising, as well as helping the owner understand where the pressure points of the business are.

"The vast majority that don't [have more than one location] experience significant growing pains and ultimately fail because they don't understand what it takes to have a multi-unit operation."

Finding Support

Once an owner is ready to take on the world of franchising, there is still a lot of hard work to be done. Mikelle Despain, Sub Zero Ice Cream and Yogurt brand manager, says it's helpful to get assistance from a franchising company.

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Despain says the owners of Sub Zero originally tried to do as much as they could on their own when they began franchising in 2008. The growth soon became more than they could handle, and two years later they got help from Five Star Franchising, where Despain works. Working with a franchising company offers a level of support that is difficult to find alone, she says.

Smith says franchisors also must be prepared for how expensive franchising can be. At bare minimum, hiring an attorney and getting agreements, financial documents, trademarks and other needs in place is pricy.

"On top of that, you're going to have growing pains. The needs of...