Should You Franchise Now or Wait? How to Know If Your Brand Is Actually Ready?

If you’re on the fence about franchising, clarity matters more than speed.

If you want an objective opinion from someone who’s been in the trenches — as a franchisee, franchisor, investor, and advisor — book a Filter the Noise Call at guycoffey.com.

I’ll help you determine whether you’re ready now or give you a clear roadmap to get there without costly mistakes.

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One of the biggest decisions you’ll ever make as a founder is when to franchise. Move too early, and you can damage your brand, your finances, and other people’s livelihoods. Wait too long, and competitors may take the best markets and franchisees before you do.

In this solo episode, I break down the five critical readiness checks every founder must pass before franchising, plus the founder gut check that most people skip — and later regret. I also explain the real risks of jumping too early versus hesitating too long, and how to use the 80% rule to decide when it’s time to move.

Key Takeaways

• Why one successful location does not mean you’re franchise-ready
• The five non-negotiables every franchise system must have in place
• How weak unit economics can quietly destroy a franchise brand
• Why systems and documentation matter more than passion
• The hidden leadership and lifestyle shifts founders underestimate
• The danger of waiting too long and losing first-mover advantage
• How to use the 80/20 rule to decide when to pull the trigger

Timestamps:

00:00 Introduction: The Franchising Dilemma

00:34 The Franchise Scaleup Show: What to Expect

01:26 Finding the Right Time to Franchise

02:53 Five Key Factors for Franchise Readiness

08:13 The Founder Gut Check

15:18 The Dangers of Hesitating or Moving Too Fast

26:32 Conclusion: Taking the Leap

Connect with Guy Coffey:
LinkedIn: www.linkedin.com/in/guycoffey
Website: www.guycoffey.com
Instagram: @guycoffey
YouTube: @guycoffey

Transcript

0:00

Here's the problem. Too many people are sitting on the fence about franchising. Founders are wondering, should I franchise now? Should I build more corporate stores and get more proof of concept? Or should I pull the trigger on this and grow really fast? And the challenge with waiting is competitors might be moving forward. Getting franchisees taking prime locations. And the challenge with moving too fast is are you really ready? Do you understand that this is a different business? And do you have the team that you can build in order to support franchisees? In today's episode, I'm gonna address some of these things, give you a checklist and help clarify this decision for you.'cause it's one of the biggest ones you'll make. If you're an emerging franchise founder, you already know this. The jump from 10 to 100 units is where most brands stall out, not because the concept isn't strong, but because the founder is drowning in chaos. I'm Gee, coffee franchisor, franchisee, and growth strategist. I've been where you are and I know what it takes to build a brand that scales without burning out, selling out, or losing control. That's why I created the Franchise Scaleup Show. Every week I'll share the playbooks, the red flags, and the mindset shifts that separate the brands that stall from the ones that scale. So if you're serious about protecting your vision and multiplying your brand, hit subscribe right now. This is the Franchise Scaleup Show. I'm Gee, coffee. Let's get to work. franchising too soon can kill a brand. Waiting too long can kill your momentum. Let's talk about the sweet spot and how to know when you're ready. You might be super excited about franchising and that is fantastic, but you have to be ready for it. There's certain things that move people to start franchising, and sometimes it's a little bit too early. So here's a couple things. If you have one location that's really doing well, but it's really based on your network, your passion and your talents, that doesn't mean it's necessarily ready for franchising. Also, if you're just hopped on a hot trend and it's working in your, your area right now, doesn't mean it's necessarily ready for franchising because it's about you and your team and getting to the next level. So I had this client that had a great business. She really wanted to grow it. And packaged it up. Got it. All franchise ready. Started out, sold to a couple people that she knew. Client, one client, a family and a friend. And she was still so in her business operationally, she was the, the face of the business. She had all the client connections. She really didn't have time. To grow this franchise business as well. And so it stalled and it was a lot of wasted time effort, and her franchisees were also not really being supported because franchising really depends on growth and having a support team. Now I really want you to focus, here's the meat of this episode and we'll go into the details later. But there are five things that I want you to know. Look at, get outside opinions on to make sure that you have these in place before you think about franchising. The first thing is the unit economics. How well is your territory or your unit operating? How much profitability is in it? Remember, whoever comes into your system, they're gonna be running the same model as you, but they're gonna have seven. Six or seven or 8% depending on what your royalty is taken off of their top line. Is there gonna be enough profit after that for them to not just make a living, but also have enough money to grow and things like that? We've seen it time and time again where it's kind of a skinny model. There's not much profit in even the founders locations and they're like, oh, I wanna, I wanna franchise this. It becomes a real challenge because there's just not enough profit in the business for the franchisees to flourish. You don't wanna bring people in. I've seen it too many times, and they've sunk a bunch of money into this. They've invested their time, effort, money, talked about it to their friends and family and are growing, using their money to help grow your model, and there's just not enough profit for them to make it. Either pay themselves or grow the business. So unit economics is number one. Number two is the systems. You are not gonna be in the room. Remember, when you're building this, think about there being 300 locations from California to Florida. You are not gonna be able to personally influence every one of those owners and all the people on their teams, every system, and every tool that you have right now. It has to be documented. Do you have that? Because if not, and you go into franchising, you're gonna have a lot of calls and a lot of emails and your support, people are gonna be overwhelmed. Like, how do I do this? How do I do this? What happens if this? You don't want that. You wanna have a solid operations manual at the very start. It's gonna be an evergreen document. You're gonna learn, you're gonna change things, but you have to have that to start. So do you have that? If not, hold off on franchising. Number three, the brand identity. Do you have the IP? Do you have the intellectual property? Is your name trademarked? Is your slogan trademarked?'Cause you can't sell that and have someone else use it unless you have the ownership rights to it. So make sure you have that. Don't get overwhelmed by that. It sounds like a, a really big deal, and it's not that big of a deal. You can do it, but you have to do it before you go into franchising. Number four is you. You're probably watching this. You're the founder. You're thinking about going into the franchising. Think about your day right now. Now think about adding a whole different business on top of your day. How's your family affected? How's your current business affected? How are the people that you're bringing into the system and selling them a promise that you're gonna support them and help them grow and help them impact their communities and their families' lives? Can you add on another business right now? If the answer's no, you have to start taking yourself out of your day-to-day operations of your business. And yes, it'll feel weird at first, but you kind of have to replace yourself, in order to be able to build another business. So look at your day-to-day. What can you add to your plate right now? And if you think franchising, like, oh, I'm gonna hire someone to run the franchise. That's not how it works. You have to be able to take everything off your plate so that you can focus on building this new business. If you don't have that yet, work on it. And there's great resources that you can find to help you replace yourself one step at a time. And the fifth thing is a capital runway. How much money do you have? To get this thing off the ground. It's not just the legal fees for the franchise disclosure document, which are significant, but nothing insurmountable. The franchise agreements, the state registrations, things like that. But then you also have to have money to build a team. Even a small team costs a lot of money these days and to buy the software and the tools that you're gonna have your franchisees use. I often use the example of, the model that you have. Your business is the jet. The cash that you have is the runway. You could have an awesome jet. But if it needs this much runway and it only has this much runway to get off the ground, it's gonna crash and burn. So really take a realistic look at your capital and how much you have in order to get this off the ground. Too many times we've seen. It could be a good model. But the franchise system just didn't have enough money to market properly, to support, properly, to invest in tools that the franchisees could use to grow easily. And it's a shame when that happens. So you have to look at that realistically. So those are five things that I want you to look at and have absolute certainty. Like we got all of those. Like, I, I think I can do this. And then. It's gonna be an inward game. You're gonna have to look at yourself, your mental capacity, your time capacity, where you're at in life. So we're gonna go through the founder gut check next. If you are listening and you're unsure if your business is franchise ready, I'd love to help you out with that. I offer a filter, the noise call, which is an objective opinion about where you're at, where your business is at, and whether you're ready for franchising. To get more information on that and to book a call, just go to my website. It's listed below. Now what I wanna share with you next is often the most overlooked part of this whole process.'cause you'll be diving into the numbers and looking at the opportunities across the country and seeing who the competitors are and the competitive landscape. And you're getting feedback that like you can really compete here. But this part is so important, and I don't want you to miss it, and we call it the founder's gut check. Understand that this is gonna be a new business. You're gonna be going into different sorts of relationships with different people, and it's vastly different than running your operation. So are you ready for this? Is your family ready for this? Are you ready to run a different business? Are you ready to share your secrets of this baby that you've developed and now it's really doing well? And now you're gonna have to share your secrets with other people. You're gonna be going into a different sales process. It's takes money and time, and you're the expert in your area right now, and you're going into being in an area where you're a rookie and you're gonna have to rely on other people's opinions and expertise. And also you're gonna have to build up a different team. One of the first things that Dave Lineer, who founded re max and it's operates in 110 countries, it's the largest franchise system. He sat down at a table with me and, 10 other people, and the first thing he said was, understand this, the people who got you here are not gonna get you there. So look at your team right now and understand that if they don't have franchising experience, they're probably not gonna be on this whole ride with you. Are you okay with that? Can they play some sort of role, down the line? Yeah, maybe. But they're. It's gonna be a new group of people around you. So are you ready for this? You're gonna have to make tough decisions, even when the franchise is going, you know, some franchisee that's really providing a lot of, growth and reputation and brand awareness for you. If they're not following your guidebook, you're gonna have to. Put them into compliance. You might have to send them a warning letter. This is a whole different ball game, so I want you to really think about these things and see if you're ready for it and make a hard and honest decision based on that, even more than the numbers. Once the numbers are all worked out and you're confident, then. This is the next most important thing and you don't wanna move forward unless it's a hundred percent sure, basically. Excuse my French, but it, you gotta make sure it's a hell. Yeah. Okay. The next thing, that we're gonna talk about is what happens if you don't move forward and it's, you are franchise ready. I have a couple examples of us in Frenchies where we, our gut told us to say no, and we moved forward and found out we, our gut was right. Should I be that vulnerable? one of the most often overlooked decision points, and whether the franchise or not, is whether you're ready. I'm speaking to you as the founder. You've got this great concept. You think you're ready. You understand what it's, you know, one, one unit doesn't guarantee that it's ready for franchising. You've double checked on the, the five points that I just mentioned to you, and you've got all those dialed in. Let's move ahead. Nope, there's one more step, and that's for you to take an internal journey, ask yourself some questions. Are you ready for this? It's a whole nother business. And I'm not just talking about bandwidth. It's, it's also expertise. It's also a, a learning curve. It's also vulnerability. You're sharing your secrets with, people that you don't know all that well, and you're trusting them to, to run your brand that you've spent a lot of time, energy, and money building up. And you're gonna have to make tough decisions. You're gonna have to say no to people that really wanna join your system, but you just know in your heart or your gut that it's not right. An example of that is, in growing our brand, there was a couple times where our initial gut said, this person is, is not the right person for this brand. We just don't see it working. And we would have actually internal team votes after we met, uh, people and spent some time with them. You know, do we, we would evaluate them on some objective things like financial capability and experience, but a lot of times it was the gut feeling that we got when we spent some time with them, like how they treated people in our. In our studios, how they treated people when we were out to dinner, how they, dealt with a challenge in their travel when they were coming to Denver and things like that. And I'm thinking of two specific times. One of 'em was, I'll just share, was that the, the person wore a headset. The whole time that they were at our discovery day.'cause they were very important and were, like taking calls or had to be ready to take calls and that was a red flag for us. But they checked the boxes in other areas. They were already a franchisee of another system that was doing well. They had exited another franchise system and done well. So there was contradictory. Evidence of whether they'd be good in our system or not. And our gut told us no. We said yes, and it was a failed, failed franchisee failed location. And that's a big deal. So you're gonna have to make these decisions and you're gonna have to trust your gut and the input of your team. Are you ready for those things? So it's not just the external factors that make you ready for franchising, it's also. You and your team, and also understand that most likely the people that on your team right now are not gonna take you to where you want to go in franchising. It requires a special expertise and usually people can't gain that expertise while they're still operating your business. So Dave Lineer the founder of re max. Sat down with me and the first thing he told me is, understand this. The people that got you here are not gonna get you there. You are gonna have to make tough decisions and let people go be super, super generous to them. Be kind to the people, but really protect the brand, and that usually involves changing people out. So, are you ready for these kind of decisions? You gotta ask that question to yourself and answer honestly. And then make a decision. And that's what we're gonna go into next, either waiting too long to to move forward on this franchising journey or moving too fast. Okay. I've provided a couple points that show you that you might not be ready for franchising. I've provided some points that hopefully you check the box on and said like, I'm ready. But hopefully you also answered honestly and understand that, oh no, I have some more growing to do. I need to shore this up, or whatever the case may be. But let's just say. You, you have everything checked off right now, like you've done your gut check, which is we just talked about, which is super important. You have the five points, you're like, yeah, I'm good to go there. I do have more than one unit location. I do have the profitability. What is the danger of hesitating right now? This is a quick break to thank you for listening. Every week, we are getting more and more people listening to the show, and this growth is helping me to improve it and make it even more helpful to you. My intention for this show is to help more people win in business and life. To that end, I have a favor to ask. If you know of an entrepreneur that would benefit, please hit the share button and shoot them a text with the link back to the show. Make this a great day. So this will be the point where I'm kind of encouraging you to move forward if you have all those other check boxes ticked off. And the danger is that your system probably isn't as unique as you would like to think it is. And we all think we have this, you know, uniqueness. But if you have a pizza brand or a hamburger brand, or a home service brand, or. Entertainment, beauty. There's probably competitors in the space already, and by you hesitating, they are selling franchise locations. They are finding the prospects before you are. Maybe they're finding the better prospects before you are. So there's a huge danger in hesitating if you have this checked off, you know that you're ready to go. I would encourage you to move forward. Make sure you have the outside opinions that verify that, and it's not just you having conversations up here. You gotta get some outside validation too. Right. The other danger is that you might have been talking about this to your team that you have already, like, yes. You know, our next step is to franchise and if you don't pull the trigger, they're gonna be looking at you like. What are we doing? Like we're running a great brand. It's the profitability's there, all the numbers are there. Like, what are we waiting for? Let's move. If you've got a players on your team, they don't wanna, they don't wanna wait around. They wanna grow. Then in some areas you're, you still might have the first mover advantage. So being the first in that space, in new locations, we had that, with our system, which was, a mid-priced, um, but high client service. Concept. And there was plenty of places around the country that had the money, had the demographics, had the need, had the desire, had the demand, and we wanted to get to those places first. So we didn't focus on a regional growth. Model like a lot of franchises do. We wanted to get to those areas first so that we could be the brand that everybody, we knew we were gonna have competition later.'cause it was going so well. If something's going so well, there's definitely gonna be people that notice and come in. So you wanna have that first mute mover advantage. You wanna be the first one in. So that's the one that everybody else is comparing themselves to. And we were successful with that, with Frenchies in a lot of markets and. If you hesitate, you don't get that first advantage. You're like, oh, this is the other concept that does blank, blank, blank. So the hesitation is team, it's also market. It's also, there's only so many great franchisees and only so many great locations for your franchise. So if you're ready, let's move. On the other hand, there is the danger of jumping too early. On the flip side of hesitating too long is the danger of jumping too early. Now, if you hesitate. You hurt yourself. You kind of hurt your team in terms of their growth capabilities and things like that, and you miss out on opportunity. On the flip side, if you, if you jump too early, there's real repercussions. Real financial repercussions, real personal repercussions, relationships, everything. So you don't wanna jump too early if you're gonna make a mistake. I'd rather have you go, and wait for a while before you, you go and maybe risk some opportunity, rather than doing this. And that's jumping too early because if you don't have your systems locked in, they're broken or they're not scalable, they're baked into your system, right in the beginning. And it's not just hurting your unit, it's hurting other units and there's real financial damage on the line there. So you have to make sure that your systems are dialed in and that they're scalable and that someone could look at your operations manual and run it without too much input from you or your support team. The other thing is if it doesn't work. Franchisees are losing money. So what works in your system or your store or your territory, it might be working because you're pretty darn good, like you've been doing this for a long time. You have trusted people around you and you don't even know the workarounds that you do on a daily basis that make this fly. Or you putting out fires effectively, or maybe you're charming and you can overcome client issues and things like that. Not everybody's gonna have your same skillset, so you kind of have to design this to go to the lowest denominator, like someone with, not a personality like yours, or not a problem solving attitude like yours or not the marketing capability, like yours. If those things aren't translating. Your franchisees are losing money, you better have the credibility and be able to point to the tools that would help them work and work profitably or, where you're gonna be in for a world of hurt. I'm talking lawsuits, I'm talking like really bad things. And we've seen it over and over again in franchising. Where people jump too early, they, they don't have everything in there. They can't scale their systems and their capabilities at the franchisees. Are losing money. And the last thing that franchisees do is point the finger at themselves. Especially if you don't have the tools to point them to, to be like, Hey, this is what we recommended. You know, this is the process that we recommend for marketing. This is the process we recommend for hiring. This is the process we, we recommend for, handling client issues. You're not following the recipe, right? And so you have to be able to point to those things and that you're using them in your own system, your own unit, or your own territory as well. And then the other thing is if you jump too early, you're gonna be burning through capital. Like how it goes in franchising for most, unless you have some crazy amount of funding or something like that, is like you have this great concept, you store up some cash, maybe you get some bootstrap financing through equity or debt. And you start out with like a pile of money. It's awesome. You've got enough money to get the FDD done and the, the franchise agreement, and you're like, I'm ready to go. And then you're like, okay, well I have to hire a, I have to hire a franchise marketer, someone that can actually market this, not just in our market, but across the country. And I have to get these. Point of sale systems and these software systems that don't cost three or 400 bucks a month, they cost like four or $5,000 a month. And this cash pile starts getting a little bit lower and lower. And it's a real thing. I shouldn't laugh because you are on a runway and you're burning cash and you have to get this thing off the ground and getting this model off the ground. The jet in my previous example is. The holy grail of franchising at the start is to get to royalty self-sufficiency, and that's when your franchisees are paying you enough money to pay your monthly operating expenses. And it doesn't happen right away. It can actually take years. So, that's the other challenge. If you're jumping too early and you don't have everything set and ready to go, that you're gonna be burning cash longer and hopefully not too long so that you can't get this jet off the ground. But that is, that is the danger. Here's a rule I want you to implement. We call it the safe trigger rule. And it's, it's the old Pareto principle of 80, 20. So if 80% of your systems and processes are dialed in, they don't have to be perfect, but they have to be dialed in and they have to be scalable. Could you hand that to somebody else and could they run your model without too much in interpretation or support from you? That's a go, that's a green light. You have to remember, your early franchisees are gonna be your partners in refining all this. We called, our early franchisees, the pioneers because there's a certain subset of franchise buyers that they wanna be at the ground floor. They wanna be like, I was there when they had two units or they had eight units or whatever. And they are higher risk takers. They're also gonna be very vocal that you don't have some system that's. Being used in 35 countries and the credibility's all there, they know that you're starting out too. And so you have to have this relationship where like, cool, we are definitely listening to you 'cause you're running our model every day in a different market could be slightly different. So we're gonna take that feedback. So you're early franchisees and this is how we did it. Some of our most challenging franchisees in the beginning were our most valuable ones, especially the ones that didn't just point out the problems, but they came like, hey. This isn't working too great. What about this? What about this vendor? What about this process? Or, I've seen this done somewhere else. You have to build that relationship in the beginning, and your 80% good processes are gonna get closer to a hundred percent. Obviously, they're gonna change over time, but you don't have to have. Everything dialed in to a hundred percent because frankly, you don't know if you're running four units in your own hometown or in your region, you don't know how it's gonna go in another region until you're working in another region. So don't worry about being a hundred percent. If you have 80% dialed in, you're probably good to go. And then I just don't want you to hesitate too long. Obviously, based on what I've said, I don't want to jump in too early, but if all these other things are lining up, I don't want you to hesitate and waiting for perfection. It's all about progress, not perfection, and sometimes the clarity on what's gonna get people closer to that comes from actually operating. So when your model is repeatable, it's ready to go. It doesn't have to be perfect. Okay. Hopefully, I've talked you out of franchising if you're not ready, because as I've talked about, the damages to your personal life, your financial life, and a lot of other people's lives is significant. But let's say you are franchise ready, say you're 80% of the way there. If your model is repeatable, it's scalable, so don't wait for perfection before you try. To go into franchising and have your model working in another market. That's where the franchisee relationships that you build in the beginning, those are with your pioneers. Actually, in Frenchies, we actually called our early franchisees pioneers. We, we were just calling it out that. They're, they're not buying, McDonald's. They're not buying something that's got 2000 units. They're buying into our franchise system that has three operating units. They're not expecting perfection. They're a higher risk taking group of people. It's probably who you're gonna be dealing with too. And they understand that everything's not gonna be perfect, but they wanna be on the ground floor. They wanna be there in 10 years when they say like, oh my gosh. Yeah, I was their fourth franchisee. I was their first franchisee. I was in the top 100. One of the things that I brag about all the time 20 years later is like my, my wife and I were one of the first hundred franchisees of any time fitness that's operating in 35 countries. It's cool. I was like, you were on the ground floor. We knew the, the corporate staff and we knew every one of their first names and now we don't know more than 20 of 'em. But those are the people you're gonna be working with and they're gonna be the ones that are helping you refine these systems. So don't worry about being a hundred percent. If you have 80%, use the old Pareto principle 80 20. If you're 80% ready to go, I would say. Go for it. As long as you've done that gut check, all the other boxes are checked, you know, and then get going and try this out. The journey is awesome. It's gonna change your life, it's gonna change your family's lives. So, there's plenty of, people out there that will help you along the way. And again, I'll just make this call out. I provide the, the filter, the noise call objective opinion from someone that's been in the trenches. I've gotten, punched in the face in franchising. I've benefited from franchising. I totally believe in the model. I will tell you flat out, if you're not ready. But I will also, if you've checked all the boxes, I will encourage you to make that leap because it could be life changing for you. Here's why you should book a filter. The noise call number one, clarity. Number two, a roadmap. Let me explain. Clarity is gonna come from me giving. You my opinion on whether you're ready to franchise or not. I've been in franchising for 20 years as a franchisee, franchisor, preferred vendor. I'm on boards of franchises and franchising is my life. I will give you my honest opinion if you're ready and help you make that leap. Or number two, I'll give you a roadmap on what to focus on so that you can get ready. So click the link below to book a call and I'll see you there. That wraps up today's episode of the Franchise Scale Up Show. This gave you a strategy you can put into play. Please share it with one founder who needs the help. You might save them months of pain. If you're ready to go deeper, whether it's building your support infrastructure, accelerating territory sales, or preparing for private equity, go to gee coffee.com. That's G-U-Y-C-O-F-F. EY and book a free franchise growth strategy call. I only partner with founders who are committed to scaling without losing control. If that's you, I'd love to connect. Until next time, protect your vision. Move fast and scale smart. I'm Gee, coffee Talk soon.