Posted: Fri 15th Jun 2018
Growing through franchise is particularly suited to companies that have a model which is easily transferable and has a process to follow for making a profit. For example, dance activities for children or tasting parties for food fans. The aim is to perfect a model that works in one area and then grow by enabling others to replicate it.
Here's a checklist so you are prepared when interested franchisees come to call.
Ensure the business is a working model of success. Franchisees will pay money for something they can see has a clear path to profit.
Be prepared to make your own accounts public or at least show what the franchisee can expect to earn if they follow the training and guidelines.
The brand is also an asset that's being bought so ensure you rightfully own it with trademarks and intellectual property protection in place.
The business model is something that has to be teach-able i.e. you can train people (some of whom may be quite new to business) on how the operation works.
After training provide a comprehensive toolkit or manual that guides the franchisee with tips on marketing, sales, finance and growing the business.
The toolkit could also include marketing templates or collateral such as posters, stickers, flyers etc.
Does the franchise involve a website for serving customers or intranet platform for accessing internal support? Either way, deliver an easy-to- use system with effective data collection so you can track progress and performance.
Have you got the right team in place; a support resource for franchisees and support for you, the business owner, in the form of a mentor or adviser.
Is your franchise opportunity restricted to a certain territory i.e. a franchisee pays to have access to a particular geographic area? If so, define this from the start.
Consider doing deals in the early days so you can expand quite quickly. This will be a factor in future recruitment as potential franchisees will probably ask to speak with existing ones. Have some quotes available to offer.
Put provisions in place to terminate the agreement if it's not working - from either side!
Get more tips on franchising at Enterprise Nation's event, grow your business through franchising, in London on 10 July. The event is delivered in partnership with Krishma Vaghela of Franchise Futures. Krishma offers some extra tips:
Franchising has many advantages if a business is considering it for growth purposes, it's far more cost effective, faster and there is less management involvement, as the franchisee becomes the local owner of the business and the one with expert local knowledge.
However, in addition to the many areas to consider before franchising, as listed above, it is crucial to get expert advice on whether your business is ready for franchising or how you can plan ahead to develop a business that in future, can be franchised.
It is also extremely useful for business owners to understand:
The entire franchise process
The role of a franchisee
The role of a franchisor
The cost of franchising
The key pitfalls
As long you seek advice, plan ahead and to your research, you could be on your way to growing your business faster than you ever could imagine.
Get the advice you need at the event on 10 July.