Top Ten - Is franchising right for your business?
Written by Mike Hanrahan
10.Discover the best route to market. The best people to talk to for getting your model in front of the right people are other successful franchisors. Franchisor forums such as LinkedIn, are a valuable free resource. Franchise associations also give you the chance to talk to other franchisors about what works for them.
9.Budget for consultancy fees and shop around for the best deals. What these are will depend on the size and scope of your planned operation, but assume you’ll need advice on franchise and legal agreements and if you’re trading internationally then country legislation and territory mapping.
8.Develop a franchise package containing everything your franchise will need to get up and running. From stationary and marketing materials to operations manuals containing core processes. These are the basics. Some franchisors supply phone lines, websites and property assistance. What you provide will be unique to your business. Establish how customers will be acquired and whether your goal will have a marketing levy to pay for national campaigns.
7.Prevent future issues from the start by ensuring all franchisees are on the same payment terms. Doing special ‘deals’ with franchisees will only cause resentment and come back to haunt you in the long term.
6.What kind of training do you need to give them before they are ready to start trading? Do you need a classroom session? Do you need to visit them on-site to help with the set-up? Do you need to provide access to an ongoing training system? Work out costs for these and build them in.
5.What kind of support will be offered to franchisees? Will you be on call 24/7? Will you be responsible for marketing and PR? I have an online forum where franchisees exchange best practice as well as organising quarterly regional meetings and annual conference. It’s great for franchisees to get together and learn from each other. No-one beats your drum louder than a happy franchisee.
4.Never stop looking for ways to improve the business; franchisees expect and respect franchisors that lead by example. Listen to ideas from franchisees and look for ways to add value to their businesses whilst avoiding becoming an unpaid administrator in your own business.
3.Simple things such as standardising and automating your monthly franchisee billing cycle will save valuable time in the future. Having clear and defined rules such as ‘franchisees sending in monthly revenue reports and bank statements to franchisor by 5th day of the month and electronic payment to Franchisor no later than 20th of month’ will make your business work like a well-oiled machine.
2.Define your Unique Selling Point’s and address the issue of why franchisees should choose your franchise over the competition. Develop your marketing materials, such as brochures, to include this and explain to franchisees where their customers will come from and why they will patronise your brand.
1.The most important thing to consider is whether or not your business is franchise- able and if there is a wide enough market. Can your business be duplicated? What makes it stand out from the competition? Does it rely on processes you can pass on or is it built on relationships it’s taken years to forge?
As an entrepreneur, you will know in your heart if your business will work as a franchise, but that’s only half the story. Ideally, you’re going to need several years of auditable accounts to prove the system works.
Equally importantly, a successful pilot franchise operation in addition to your own business augments the credibility that the model works and will help sell franchises. It can also help you spot and deal with any problems early on. The pilot makes a great case study for the launch of your franchise business and can be used in your future marketing.
Established in 1993 as a cleaning business and 2003 as a franchise, Maid2Clean is one of the most successful domestic cleaning franchises in the UK, with 13,000 cleaners and a turnover of £6m
With 144 franchises in the UK and Ireland it recently expanded into Australia where it is rapidly gaining momentum and plans to grow the business in a similar fashion to the UK.