10 Tips you Should Know about Franchising Your Business
Every business owner wants their business to grow over time and increase its revenue and profits. This process takes some time, and success is far from guaranteed. The franchising model presents businesses with a potential route for rapid expansion with less upfront capital.
Below are 10 tips every business should know before they commit themselves to franchising.
- 1. Make sure your business is sound
- 2. Test before committing to a full rollout
- 3. You need clear targets
- 4. Choose franchisees carefully
- 5. Produce a detailed operations manual
- 6. Be prepared to train and support franchisees
- 7. Put together a franchise package
- 8. Make sure your intellectual property is protected
- 9. Set an example with your core business
- 10. Take legal advice before you launch your franchise
1. Make sure your business is sound
Franchising can be a very effective way of rapidly expanding a successful business. But if your core operation is weak, franchising can prove disastrous. Before you commit yourself fully to franchising your business, you should have a solid financial track record and a proven business model.
Without these in place, you’re going to have trouble attracting worthwhile franchisees. If your business is going through a rough patch, it’s better to wait until you’re in a stronger position before franchising.
2. Test before committing to a full rollout
Before you add your franchise to a franchise opportunities directory and start taking applications from interested franchisees, it’s a good idea to launch a pilot operation for at least 12 months.
This test franchise will enable you to ensure your business model is robust and ready for franchising. If there are any issues with your planned approach, this pilot run will allow you to identify them and adjust your plans accordingly.
3. You need clear targets
Your franchisees will take on responsibility for running their respective locations, but you are still ultimately responsible for the health of your business as a whole. Your franchising agreement should set out the key metrics you will use to judge their performance and the consequences if they fail to meet those targets.
But if you don’t provide them with clear, achievable goals, they don’t stand a chance of living up to your expectations.
4. Choose franchisees carefully
Your franchises will only be as strong as the franchisees that run them. If you want them to be successful, you need to be selective about who you hire.
Whenever you come across a prospective franchisee who is passionate about your business and eager to see it succeed, you should snap them up without hesitation. You want people who are as committed to the success of your business as you.
5. Produce a detailed operations manual
Every successful franchise needs an operations manual. This manual is key to ensuring consistency across all your franchises and helps franchisees get up to speed as fast as possible.
Your franchise manual should provide all the information new franchisees need to achieve the results you expect and run their franchises to the desired standard. The document should set out all your company procedures and policies in as much detail as possible. Feel free to use free templates to create infographics which make your information more structured.
6. Be prepared to train and support franchisees
A good operations manual will improve your franchisee’s chances of success, but you will still need to provide training and ongoing support. Your approach to training and support will be a decisive factor in determining your franchises’ success and consistency.
Once your franchisees have completed their initial training, you should arrange for regular check-ins with your franchisees to catch up and ensure the health of your network.
7. Put together a franchise package
A franchise package is a kind of welcome package for new franchisees. Your operations manual should form part of your franchise package, but it should also contain branded stationery, marketing materials, and anything else that could help your franchisees find their feet when they start managing their franchise.
You might also want to include contact information for people who can help set up websites, internet and phone connections, etc.
8. Make sure your intellectual property is protected
Your business’s intellectual properties are essential assets that need protection. Strong branding is critical to the success of any franchise. As a franchisor, you are responsible for ensuring your brand is protected.
Register your trademarks and patents with the appropriate offices and snap up any domain names you want to use before someone else gets to them.
9. Set an example with your core business
The more successful your main business is, the more motivated your franchisees will be. Leading by example will demonstrate your business model’s potential to franchisees and give them something to aim for.
All the while, look for ways you can help your franchisees improve. If you introduce a new procedure or policy in your core business that proves successful, pass it along to your franchisees so they can adopt it as well.
10. Take legal advice before you launch your franchise
Before you launch your franchise, it’s important you seek legal advice. All your important documents, especially your franchising agreement, should be reviewed by a solicitor to ensure the language is appropriate.
If you want to register with the British Franchise Association for instance, your franchise agreement will need to meet certain requirements. A lawyer experienced with franchise law can ensure everything is in order.
With the right approach, franchising can enable an already successful business to reach its full potential. However, rushing into the process can put your entire business at risk, so proper preparation is essential. Stick to the tips above, and you will be well-prepared for the franchising world.
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