The part of a franchise you will not find in the prospectus

Mathnasium UK explores how prospective franchisees can look beyond the prospectus to assess a franchisor’s support structure, investment priorities and commitment to long-term success

Mathnasium UK explores how prospective franchisees can look beyond the prospectus to assess a franchisor’s support structure, investment priorities and commitment to long-term success.

Anyone who has sat through a franchise discovery day will recognise its running order. The brand story comes first, followed by the customer proposition and the numbers. Support tends to arrive near the end, usually as a slide covering training and launch marketing and it is offered as reassurance rather than as something to be tested. Most prospective franchisees accept it on those terms. That is a missed opportunity, because the structure behind a franchise is one of the few places where a franchisor’s real priorities show and it is much harder to dress up than a financial projection.

What a support offer cannot tell you

Support as it is presented during recruitment describes the present. A franchise agreement will typically run for ten years or more and little of the help a franchisee needs in the first six months will still matter by year five. Early on, the problems are practical: finding premises and getting the doors open. Later they are harder to pin down. Enquiries flatten for no obvious reason, or a second territory starts to look tempting just as the best manager begins weighing up a business of their own. A franchisor can be very good at the first set of problems and have little to offer on the second.

The more revealing line of enquiry is therefore historical. Ask what the support model looked like three years ago and what has changed since. Ask what the franchisor has stopped doing and why. A head office that can explain what it rebuilt and what prompted the change, is showing that it watches its own performance. One that describes exactly the offer it has always made may simply be fortunate, but it may also not be looking.

Shape matters more than size

Headcount is a weaker signal than it appears. As our network at Mathnasium UK has grown, we have doubled the national support team, but the more consequential change has been in its shape. Generalists covering a little of everything have given way to people with specific expertise and in some areas we have found that specialist knowledge is better bought in through external partners than built in-house. None of that means bigger is better. A lean franchisor with experienced people and clear processes may serve a small network far better than a crowded head office.

What a prospective franchisee can usefully establish is the balance of the team. Find out how many people work on recruiting new franchisees and how many on supporting existing ones and which members of the support function have run a unit themselves. A franchisor whose recent hires sit mostly in franchise sales is telling you where it expects its growth to come from.

What the franchisor can actually see

Marketing exposes the gap between support that is described and support that has been built. Almost every franchisor offers marketing help. Far fewer can tell an individual franchisee which channels are producing their enquiries, what each enquiry costs and how many become customers.

We learned this in practice. Until we could attribute enquiries to channels at the level of individual centres, our marketing conversations with franchisees relied on instinct. Bringing paid media, search, PR, email and social content under shared measurement has made those conversations far more productive, because both parties are now working from the same evidence. It has also shown how much of a franchisee’s marketing performance rests on systems they would struggle to build alone.

The useful question, then, is what a franchisor can see rather than which channels it uses. Ask for an example of the reporting an existing franchisee receives and how any national marketing contribution is spent and accounted for. If a franchisor cannot show you how local results are measured, you will be relying on goodwill when those results disappoint.

Testing it in the network

Existing franchisees are the obvious source of evidence, although asking whether they are happy with the support tends to produce polite and unrevealing answers. Specific questions work better: when head office last helped with a problem the operations manual did not cover, or whether anything they raised has changed how the network runs. Speak to someone in their first year and to someone who has long since outgrown the onboarding programme. The difference between their accounts says a good deal about whether support develops once the agreement is signed.

None of this replaces scrutiny of the brand or the unit economics, which describe the opportunity as it stands today. The infrastructure behind a franchise shows what the franchisor has learned and where it is choosing to invest and that is a better guide to the next decade than any projection in the pack.

This article comes courtesy of Mathnasium UK, the UK arm of Mathnasium, a global maths education franchise.

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