Franchising is an attractive option for aspiring entrepreneurs. Not only is it a path to business ownership, but franchising comes with less risk and more support when compared to starting a business from scratch.
While the concept of franchising is appealing, there are various franchise models that offer unique benefits and challenges to prospective franchisees. A conversion franchise model is ideal for current business owners who want to become franchisees.
What is a Conversion Franchise?
A conversion franchise is when a franchisee joins their independent business with a franchisor in the same industry. Forming such a partnership will involve a structured process where the independent business aligns its operations, branding, and policies with those of the franchisor. The following industries are particularly well-suited for conversion franchising:
- Real Estate
- Cleaning and Restoration
- Hospitality and Food Services
The independent businesses in these industries could benefit from the standardized, scalable systems offered by franchises.
3 Advantages of a Conversion Franchise
For franchisors, converting independent businesses to franchises is a way to expand quickly with lower costs compared to starting a new location. It offers instant local market penetration with experienced business operators.
For the independent business owner, becoming a franchises offers the following benefits:
- Immediate access to a well-known brand and customer trust.
- Operational support, training, and marketing resources.
- Increased revenue potential due to brand credibility and enhanced systems.
3 Challenges of a Conversion Franchise
While conversation franchising offers valuable benefits, every change always comes with its own challenges. For an independent business owner, the challenges to becoming a franchise include:
- Costs of rebranding and aligning with franchisor standards.
- Some loss of independence in decision-making.
- Need to adapt to new operational systems and processes.
These challenges are not hard and fast reasons for a business not to join a franchise system. They are simply points to consider when weighing the option of a conversion franchise.
Basic Steps to Transition to a Conversion Franchise
While the exact steps to becoming a conversion franchise will differ with each opportunity, the general path to doing this includes the following:
- Research and Due Diligence – Independent business owners should investigate various franchisors and franchise opportunities. This includes understanding the training and support provided, speaking with existing franchisees about their experiences, having a clear idea of the costs of becoming a franchisee, and more.
- Initial Consultation – Once a business owner has an idea of which franchise to join, it’s important to meet with the franchisor to discuss expectations and compatibility.
- Signing the Agreement – It’s worth hiring professional guidance, such as a franchise attorney and accountant when considering all of the legal and financial aspects of a conversion franchise.
- Rebranding and Integration – Once all the legal steps are taken care of, it will be time to start converting the business to a franchise. This includes rebranding, training, operational changes, and more.
Thinking About Converting Your Business to a Franchise?
Are you a business owner wondering if it’s time for a change? While a conversion franchise isn’t for everyone, it’s worth assessing your business and goals to determine if the franchise model fits your needs. You can also seek advice from an expert franchise consultant at FranNet to explore your options. Schedule your free consultation today to get started!