Are My Sales Strong Enough To Franchise

April 6, 2012 - PRLog -- The sales criteria needed to determine whether a business has what it takes to franchise is dependent upon many variables.  The gross sales of businesses in some instances are not always the determining factor of profitability. For instance, restaurants may see high level of sales but their profit margins are typically low. In other businesses that have lower start up costs such as home based businesses, or distribution franchises,  the overhead is minimal and gross sales may not be at a level of larger establishments but the margins are much stronger.

The standard measure applied to determine franchisability is that a franchisee, by the second year, needs to have a 15 percent return on their cash investment plus a manager’s salary. If this measurement does not seem feasible for the business, one must reset their sales goals and gear up their marketing initiatives in order to pursue franchising.   Sales in every industry can vary dramatically.  If properly disclosed, a strong sales figure can be a positioning tool in the franchise marketplace. The type of industry, the market and the concept all need to be taken into consideration when it comes to evaluating gross sales.  As a business owner, one detail to remember, whether the sales are $100,000 a year or $1,000,000 a year, it takes just one individual to see the potential of the business and invest in the franchise.

Are you ready for the next level?   

The issue of sales criteria is one of the many topics of Francorp’s online “Franchise A Business” seminar.  To learn more about franchising, or how to franchise your business, visit http://www.francorp.com or call 800-372-6244.  Also, visit http://www.francorp.com to download the free e-book and take the franchise quiz today!