Franchise Readiness Audit Checklist

Franchise Readiness Audit Checklist
Introduction:
The Franchise Readiness Audit (FRA) is conducted to determine the franchisability of the
business. This is a very essential audit which must be done before venturing into a franchise
business as it shall determine whether the potential franchisor are able to meet the standard
requirements of franchising and whether the business owned shall be successful when franchised.
1. Is your operating model profitable?
A. Yes
B. No
2. Number of units currently in operation.
A. 1 Location
B. 2 Location
C. 3 Location
D. 4 Location
E. 5 or more locations
F. No location
3. Duration of which your business has been in operation.
A. Not in operation yet
B. Less than 6 months
C. 1 Year
D. 2 Years
E. 3 Years
F. 4 or more years
4. Your business’s distinctiveness from competitors.
A. Not very distinctive
B. Somewhat distinctive
C. Very distinctive
D. Unique
5. Cost of duplicating business, not including franchise fee.
A. RM 400,000 or more
B. RM 200,000 to RM 399,000
C. RM 100,000 to RM 199,000
D. RM 50,000 to RM 99,000
E. Less than RM 50,000
6. Marketability of the business.
A. Local
B. National
C. Regional
D. International
7. Competitiveness level in the market for your products and services.
A. High
B. Moderate
C. Minimal
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8. Level of standardization of your business.
A. Very little
B. Some basic policies and/or handbooks
C. Very well documented
D. Computerized
9. Duration needed to teach your operation prodecure to others.
A. Special certification needed first
B. 2-6 months
C. 1-2 months
D. 1-3 weeks
E. Less than 1 week
10. Your business’s sales performance as compared to other similar businesses.
A. Much lower
B. Somewhat lower
C. About the same
D. Somewhat higher
E. Much higher
Points:
A B C D E F
1 10 1
2 2 4 6 8 10 0
3 0 2 4 6 8 10
4 1 5 7 10
5 2 4 6 8 10
6 2 6 8 10
7 1 5 10
8 2 6 8 10
9 2 4 6 8 10
10 2 4 6 8 10
My Score:
Points
Ratings:
0-39: Not Ready for Franchise
Your business concept might hold a great deal amount of potential for expansion. But as of now, it has yet to
form a strong enough core stability to venture into franchising. It is hence advisable that you concentrate in
refining the overall operation for the time being, with aid from business exports who are capable of preparing
you and your business for expansion.
40-59: On the Verge
Your company stands a slight chance to be able to succeed in franchising at its current state. With further
improvement to the business procedures and other operation components, the company will have a better
chance to successfully franchise.
60-79: Good Prospect
You should seriously consider franchising to expand your business as the odds seems encouraging.
80-100: Go for it!
Your business boosts a very bright potential for rapid and successful expansion though franchising. Unique
concept, broad market coupled with ample capital altogether constitutes a great room for expansion.
Franchise Readiness Audit Checklist Page 2 of 2
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