If you have thought about opening another franchise location, you may have considered taking on a partner. Know what to look for before you sign.
A true partner
Partners can help shape and strengthen the future of your business but taking on a partner can be a difficult exercise in trust. As in marriage, your franchise will benefit if you choose your partner wisely. You may even be considering asking your spouse to help open another location.
To protect your investments, it is important to choose a partner that will help drive your business in the right direction. A new voice in decisions could help redirect a struggling business or weigh down a successful one.
You may have a potential partner in mind because they could bring significant assets, experience or value to your business. These assets could include:
- Financial Stability
- A potential investor, stakeholder, a silent partner with a diverse investment portfolio
- Willing to be as hands-on or hands-off as needed
- Geographic Advantage
- Connections to an ideal location for potential expansion
- Previous experience in franchise ownership
- Passion and marketability
- Passionate about your brand
- Skills and ability to market to a new location or expand your current brand
A partner could also be a smart choice if they display the following characteristics:
- You feel comfortable being transparent about money with them
- You can discuss where money will come from (such as personal loans or home equity)
- You have a mutual understanding and agreement about the business
- Goals you want to achieve
- How you want to achieve your goals
- You know each other’s financial responsibility styles
- If either of you have past credit problems that may interfere with future loans
- You have planned how to resolve disputes
- If/when you disagree on a decision, you have planned a resolution path
- You know your emotional and financial limits
Your careful choice of a business partner should complement your business model and your business style. Your partner could provide new ideas, assets, and strengths that could help diversify and expand your business in ways you couldn’t do alone.