Franchising is an exciting avenue for any business. But sometimes it can be difficult to know what you need to consider before signing on the dotted line. Check out our tips on getting ready to become a full-fledged franchise
1 The first important step is working out if it is actually right for your business. It sounds like a rather facile statement but it’s absolutely vital to know this is the shape your want your business to take. Some projects are about rapid growth and massively increasing your visibility; others are about a controlled brand and exclusivity of service. Models of mass-production and distribution also fair well under a franchise model – this is why franchising is so effective a choice for a fast-food outlet and such a poor one for a gourmet restaurant. It also comes with significant start-up costs, which means you need to make sure it’s a concept that can, and will, scale.
2 Like any brand your potential franchise needs to have individuality. This doesn’t mean your product or service needs to be something revolutionary or something nobody has ever thought of but it is important that the presentation has some novelty. If you’re going down the franchising route, every time a potential franchisee or customer sees your brand amongst all your competitors’ you want to be sure it’s yours that they remember. Whether its your approach, your sustainability or your branding, something needs to stand out.
3 Despite the fact you need to be unique, you also need to guarantee that your service or product will be sought-after. There needs to be a huge demand for your brand because you’re going to be selling that brand to two sets of people; the franchisee and then the consumer. If demand falters at either level you’re going to be left with an expensive investment on your hands that will resolutely refuse to grow. Few people would try to sell something they thought served absolutely no need but you still need to be brutally honest with yourself. A recruitment agency for Go coders may be a great idea but will it reach a high level of penetration? Are there enough Go coders to support 200 agencies?
4 One of the most significant factors of franchising is that the model is replicated. Over and over. Everything you do needs to be replicated by your franchisees and carried out with almost complete autonomy. Obviously a significant part of the job they are taking on is to commit adapting themselves to and learning your model but you need to be able to make their job as straightforward as possible. Trying to reduce and explain your model to a third party could help masses here and teach you just how much there is to what you do. It might not be until you unpack it you realise where your processes could be simplified.
5 Whilst opening a hundred and fifty stores may sound like a dream ticket, you can’t just wash your hands of your franchisees once you’ve signed the contract. One of the key elements of the franchisor / franchisee relationship is a commitment to providing ongoing support to your franchisees. This can vary wildly. Some sectors – where franchisees might act as small, even autonomous, units – require administrative and organisational assistance. Others will require less direct input but will almost certainly require assistance with recruiting. This requires an understanding of exactly what roles your franchisees will need to take on and making sure you have the resources to deal with the volume. It can be a hugely stimulating process, supporting teams around the country but it also will require a high level of preparation and flexibility.
6 Bear in mind that you will be maintaining a network. This means walking a tightrope. On the one side you are responsible for your franchisees. Failing to properly account for their needs, either at the agreement stage or after years of trading, could hurt them dearly – eventually resulting in a gradual weakening if they take action or are unable to maintain high levels of service. The other side is equally as important – the health of the network is vital and you need to take every precaution to ensure it stays afloat
7 Lastly, there’s one thing every entrepreneur should do before committing themselves to franchising their venture – seek expert advice. There are plenty of people to assist you with your journey into franchising and making sure you’re aware of the people who are out there can help you feel much more secure in your decision. First off it’s worth registering with the British Franchise Association (bfa); whilst the service is opt-in it’s the closest thing to a formal regulatory body we have in the UK and membership will ensure you make contact with the right people. Secondly don’t be afraid to seek other advisors; from franchise consultants and banks to media outlets and recruitment consultants, there are a huge number of services available. A full listing is available on the bfa website.