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Small Business Center

Expanding a Small Business by Franchising: Consider These Questions

March 25, 2022

If you’re a business owner ready to expand but you’re short on money, time or people, it may be time to think about creating franchises. About 10.5% of businesses nationwide are franchises, according to government data. When considering this option for your business, ask these questions:

  • Does your company have a strong track record, with experienced management, a proven concept and a strong local reputation?
  • How different is your business from your competitors? How solid is your unique selling proposition?
  • Can you teach someone else this business? Are your operating procedures clear, and can somebody learn to operate your business within three months?
  • Can it generate returns of 15% to 20% after salaries and royalties? Franchisees need to see results in this range by year two — or year three at the latest.

Learn more in Entrepreneur’s Franchise 500 commentary.

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