5 Things to Consider Before Franchising Your Business

Sep 14, 2016
Reading Time: 3 minutes
Written by Sydney Rae

Your business is performing well, sales are increasing, and you’ve successfully distinguished your brand within a competitive market. You may be considering franchising your business. A franchise is a great way to expand your small business. However, it takes time: establishing a franchise system and marketing preparation can take up to 3 years. It can also take another 5 years before you start seeing a steady revenue and net profits.

You will have to consider changes to not only your business model, but also consumer satisfaction and ultimately, revenue. For legal knowledge that is tailored to your specific legal needs, LawPath can connect you with a franchise lawyer.

Here are some of the considerations that will help you determine whether your business model can work for others under a franchise arrangement.

5 Things to Consider Before Franchising Your Business

1. Is your business successful, unique and replicable?

To ensure the successful operation of your franchising system, your small business should have operated for at least three years to prove that it has a steady revenue, a clear business concept and a system that can be replicated. This means that the business should be structured and systematised in a way that can support a number of franchisees in different locations.

It may be possible to test the success of your franchising system by opening several outlets using your own capital. Testing your business’s capability and management can give you ideas to improve, and ensure the successful beginning of your franchise operations.

2. Do you have a distinctive brand?

In order to distinguish your business from its competitors, it’s important to develop and create an awareness around your brand. A strong franchise arrangement will develop from a brand that is already highly recognised in the marketplace. That way, even if other businesses create similar products or services, your brand is what can set you apart, from your logo to your corporate identity.

To protect the distinctive features of your brand, it is imperative to protect your intellectual property with a trademark. LawPath has access to highly qualified IP attorneys that can assist with the trademark registration process.

3. Is your business sustainable?

Consider whether your business will be able to adapt and grow in the face of change; from fluctuating economic conditions to different technologies, laws and market trends. It is important to have a business that can mould itself in anticipation of change and even create new opportunities so that it is not lagging behind competitors.

4. Do you have the necessary skills and attributes?

When you franchise your business it will expand along with your team and your responsibilities. You are already capable of running your own business, however running a franchise group can be a demanding task. You will need to be organised and have good communication skills to train, encourage and listen. This should allow you to maintain a strong team ethic and an even stronger organisation.

5. Do you have access to professional advice?

Before franchising your business, it is important to seek out advice from experts who are experienced in franchising. They can provide:

  • Proper advice that is suited to your franchising plans; and
  • Make sure that all aspects of your business’s intellectual property rights are protected before you franchise your business.

Through LawPath you can get in touch with experienced franchising lawyers to provide legal guidance and assist you in franchising your business.


As one of the most franchised nations in the world, Australia has some of the world’s strictest regulations for new franchisors, including the new Franchising Code of Conduct. This means there is a small margin for error for small businesses starting a franchise. However, if you have a strong business structure and are committed to self-development, a franchising arrangement can effectively expand the success of your business.

Looking to franchise your business? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

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