How does a business determine whether its product/service is suitable to be franchised?

Franchising generally suits a business format that can be easily replicated. To determine whether a business is suitable for franchising, a business owner should consider running a pilot operation. Although the business owner will usually own the pilot operation, it should be operated as though it was being run by a third party. This is so that the pilot business replicates, as far as possible, the conditions that will apply to actual franchisees.Running a pilot operation will help the franchisor to develop the operations manual that franchisees will use to run the business, as well as establishing the general support structure it should offer to franchisees, including training and marketing requirements. A pilot operation will also highlight any operational issues that can be ironed out before the franchise is launched to third parties, as well as providing financial data that may be used to provide an indication of the franchised business’ potential financial performance.To get a good idea of how the franchise business operates and performs, any pilot operation should ideally run for at least 12 months. Indeed, the British Franchise Association suggests that for a business model to be proven it should have been proven to work for at least 12 months in the format in which it is to be franchised.