Six expert opinions you need to seek for franchising success
Without sound advice, the road to franchise freedom can be pitted with perilous potholes of the legal and financial variety
There are only around 1,000 franchise opportunities available in the UK – leaving the market wide open to create and launch your own. Knowing which professional groups to go to for advice on that journey, however, can make the difference between profitability or commercial failure.
Here, Cheryl White, founder of the Mercury Franchise School Ltd, reveals the six experts you need to speak to – and the one key question to ask them:
Potential franchisees need to know that they are buying into a profitable, sustainable business model. The best temperature check of your business’ financial health is your management accounts, which typically include a Profit & Loss Statement and Balance Sheet. Engaging an accountant to prepare these financial reports for you, as well as projection figures, allows interested investors to see how much money they are likely to make. An accountant can also assist with pricing up the franchise and calculating your estimated royalties from ongoing monthly service fees.
Key Question: How much can a franchisee expect to earn in the first three years of trading?
You can have a fancy website and all the branding bells and whistles, but nothing is more likely to destroy a great franchise than expensive legal wranglings. A franchise lawyer will set you on the right path from Day One – writing a bespoke, watertight legal franchise agreement so that the franchisor and franchisee each understands their legal rights and obligations within the franchise model. Should you ever end up in court, this document will prove vital. An IP lawyer can be engaged separately regarding checking and registering any patents or trademarks.
Key Question: How will potential investors recognise the key points in the legal agreement?
With principal responsibility for deciding how your franchise will be run, the operations lead or Chief Operating Officer (COO) determines everything from how to structure an enquiry to the onboarding process. When engaged on a longer-term basis, the COO’s role is to keep your franchise fresh and innovative, as well as to ensure franchisees understand what targets they are working towards. By removing the dry rot of complacency, and maintaining high standards across the franchise, the operations lead maintains profitability and keeps you on track for growth.
Key Question: What monthly turnover target should I set for my franchisees?
Franchising your pilot business model involves marketing to an entirely different audience to that of your original business. A marketing expert can provide clarity on who your new ideal customer is and write a franchise prospectus that outlines the opportunity on offer. This document needs to ‘wow’ the person who has made an initial enquiry and help to close the sale.
Key Question: What kind of social media content will attract the right people to my franchise prospectus?
Seek a designer’s opinion for total clarity on your branding, and on how each franchisee can implement it consistently across your franchise network. Taking the guidance developed by your operational lead, ask the designer to transform what is often a bland document into a fully developed operational manual that is both easy on the eye and easy to use. Franchisees who have clarity on how you want them to go about doing business are less likely to ‘go rogue’, become disengaged from your network or drop out altogether.
Key Question: How do I make my operations manual user-friendly?
A support manager is the bridge between your franchisees and your COO, with additional responsibilities around safeguarding mental health. For the long-term survival of your franchise, you will need eyes and ears on the ground that can keep in touch with franchisees – ironing out issues as they arise and offering a comforting shoulder. Similarly, they can feed back recommendations to your COO on how best to structure the franchisees’ support programme.
Key Question: How can I drive up franchisee engagement and retention?
It is prudent – and essential – to speak to professionals who can help to lay the foundation of your franchise. Critically, these experts also need to work in an integrated manner, not in silos. From marketing to operations, accounting to legal, ask yourself: Who is on my franchise team for 2023?