I’ve often said franchising is a marriage where both parties work towards a common goal. But what exactly are the expectations the two partners should have in mind when forming a union together?
In a franchise relationship, the franchisee will bring drive, ambition, hard work, focus and their own business skill-set, while the franchisor will contribute a proven business system, training, marketing and ongoing support.
Different franchisors deliver ongoing support in different ways. For instance, the Bardon Group runs four franchises, so I’m well-versed in the approach, taking support into consideration across Recognition Express, ComputerXplorers, Kall Kwik and Techclean.
To start with, we have people who specialise in the key business disciplines – either directly employed or services we pay for on behalf of franchisees.
So, all the main business areas of marketing, sales, planning, finance, procurement, curriculum development, retail management and training are covered in-house.
Once a franchisor has their support structure in place then they have to make sure they actually deliver ongoing care, which may well see them include: weekly email news updates, monthly hard copy bulletins, additional alerts as developments dictate, telephone support on tap, network meetings and on-site visits from various team members.
Personally, in my role as franchisor, I also like to visit franchisees virtually every week and cover anything from a general catch-up to full business planning.
It’s important that you as a prospective franchisee investigate the service and support of the franchisor and you can do this by meeting with them, reading the business manuals, talking to other franchisees and taking advice from the banks and the bfa. There’s no better time to research the franchisor then before you take the franchise
Remember that you'll likely be paying both a licence fee and ongoing royalties. The licence fee gives you the authority to use the franchisor’s proven system, together with the right to use the brand and to take advantage of all the investment that has gone into developing the process, methodologies and tools that are intrinsic to the business.
You will likely also pay an ongoing royalty to the franchisor, which is generally calculated as a percentage of your franchise's turnover.
My old boss used to impress on me that the royalties paid were essentially like a ‘lease payment’ and should encourage us, the franchisor, to continually improve the system, add new tools and examine new business opportunities – and this is what you want from a franchisor.
So what should you expect? You should expect an ethical operation with a proven system, backed up by good collateral, training and business processes with head office support from caring personnel committed to helping you to become a success in that business.