Adjustments to make when become a franchisor

The transition from successful business owner to successful franchisor is a difficult one to make.

Adjustments to make when become a franchisor

The transition from successful business owner to successful franchisor is a difficult one to make.

When The HR Dept started franchising in 2005 we had been established as a successful business since 2002. We knew we were doing something right, and we were keen to develop things further.

It was an exciting time, but full of challenges. One of the biggest of these was the transition from being the owner of a micro business to someone who had oversight of a network of franchisees. 

I soon discovered that management of our franchisees (we call them Licensees) would require an entirely new set of skills. However as time went on it also became clear that some strong foundations, to govern who we selected as Licensees and how we managed them, would help us remain faithful to the values which had helped us grow the initial business in the first place.

Let me share some of those with you here. Although everyone’s business journey is different, I think there are some common principles which will help guide new franchisors through this tricky process.

Surround yourself with good people 

From the start we had a strong team at The HR Dept. My husband Mike is our finance director so we manage the business jointly. That’s an example of my point here – it’s helpful, probably even vital, to have people around you who share a common purpose and one agenda.

Of course as you venture into franchising you need a whole host of people to support the growth of that side of the business – lawyers, marketing professionals, accountants and suppliers of related services. So it makes sense to take time and choose those people carefully, with a long-term strategy in mind rather than making decisions based purely on short-term benefits such as price.

Any business owner will know that one of the hardest things to do is delegate responsibility to other people. The company is normally your own creation, so it’s difficult to pass on responsibility for aspects of running it to people outside your organisation. But you have to do it! Your company won’t progress until you do.

It’s also vital get the ball rolling with the right franchisees first off. Our first Licensees set the tone for the rest of the network and they remain some of our most valued, supportive and constructive customers.

Set up good processes and structure

I’d suggest that the other main challenge of moving from small business owner to franchisor is formalising all the business processes which you probably take for granted.

There are two reasons for this. Firstly because franchisees, many of whom will have never run their own business before, will need help in many different aspects of managing their own company. Each will have different strengths and weaknesses, so you need to cover all the bases. 

The second reason is because this process, of setting out the procedural skeleton of how you expect your franchisees to operate, gives you an opportunity to define the philosophy and approach of the business. Ultimately, this will be felt by your franchisees’ customers and will impact the brand you are looking to develop. 

That’s why the franchisee agreement is key. It gives you a formal element of control over how the franchisee runs their business, setting clear and indisputable ground rules which then frees you up to develop a productive relationship with them.

It’s important to be self-critical here, as well. While the success of the business to date will be largely based on the way that you have always done things, you need to be realistic about which of those will effectively translate to a wider network and which, by contrast, should remain your own particular habits.

Good management of franchisees

There’s a crucial balance to be struck on how you manage your franchisees. I’ve already mentioned that many of our Licensees are new to running their own businesses – it’s often a bit like urging fledglings out of a nest. You can’t do it for them, so they need to be empowered to take their own decisions. But they can’t do it completely by themselves, so you need to be there to offer support when it’s asked for.

Striking that independence balance is also important when it comes to brand management. By all means give your franchisees room to breathe. But they need to remember that ultimately the brand is yours and each franchisee’s performance has potential to damage or enhance the reputation of every else.

In general, I’d suggest that you need to be tough but not overly so. And have the courage of your convictions! Ultimately, people will look to you for guidance and decision making and, while your choices will affect all your franchisees, it’s you and your immediate team who will bear the brunt of your determinations.

ABOUT THE AUTHOR
Sue Tumelty
Sue Tumelty
RELATED ARTICLES