Is Your Business or Company Right For Franchising?
Franchising is not about rescuing your under-performing business or company.
In fact, franchising is about:
- Taking your already successful business or company to the “next level”.
- Expanding and increasing your business’s or company’s “market share”.
- Generating sufficient gross profit margin that allows you and potential franchisees to:
- Make money and
- Grow your franchise business.
Find a Strategic Partner
Franchising your business or company will likely be the biggest business decision you will ever make. For this reason, you should find a strategic partner or someone who is willing and able to help you in determining:
- Your strengths and weaknesses,
- What you want to achieve; and
- The steps you will need to take to help you get there.
Prepare a Business Plan
It is extremely important that you prepare a “business plan” for franchising your business. Your business plan should include the following key elements of your business’s or company’s strategic planning:
- Its vision, which sets out what you want your business or company to accomplish.
- Its mission, which sets what your business or company should do to achieve its vision.
- Its values, which influences everything your business or company does, as well as influencing its reputation.
Is Your Business or Company Ready to Franchise?
Here is a checklist to help you determine whether you have a potential franchise business or company:
- Does your Franchise “Brand” Stand Out?
Because potential franchisees have many franchisors to choose from. It is for this reason, that you need to create a Unique Selling Point (USP). Your USP will enable you to compete against the more established franchisors.
In other words, you should focus your creative efforts on differentiating your concept or idea from your closest direct competitors.
- Do you have an established “Brand Name and Reputation”?
Having an established brand name and recognition serves as a convenient reminder to both consumers and potential franchisees of your business’s or company’s reputation and goodwill. In addition to having an effective brand name, you will find your customers or clients will want to:
- Buy related items of the same brand name from you; and
- Recommend your brand name to family and friends.
Remember: It is important to remember that your customers or clients buy your established products or services for the following reasons:
- Your products or services meet their needs, and
- Your products or services solve a problem.
- Do you have “Detailed and Tested Business Systems”?
You need to make sure that your operating systems and corresponding procedures are clearly documented in manual form.
- Do you have Set and Proven Business Methods?
Having set and proven methodologies in place will benefit you in a number of ways such as:
- Your chance of success is greatly increased.
- You will prevent waste of time and effort.
- You will eliminate unnecessary actions.
- You will ensure consistent reporting and analysis.
- Do you have the necessary “Skills and Expertise”?
You need to make sure you have the necessary and tried and tested expertise, skills, and know-how and more importantly, you can also transfer these skills, expertise, and know-how to your franchisees.
- Can you provide “Reliable and On-Going Support” to your Franchisees?
You need to have or be able to acquire the ability to provide reliable and on-going support to your franchisees.
- Can you provide assistance with Franchisee Training?
You should be able to provide training support in the use of tour systems and procedures. With this in mind, you should at least be able to:
- Construct and present quality training to your franchisees on the most important and critical components of your franchise operations.
- Protect the Use of Your Trademarks
It is critical that franchisees only use your approved trademarks and the usage of your trademarks are in strict accordance with your established guidelines. For this reason, you should provide trademark art (e.g. logos) to franchisees in electronic format and with the strict requirements that the trademark art cannot be created or altered in any way.
- Do you have Well-Designed and Comprehensive Marketing Plans?
You should have in place comprehensive marketing plans for the overall franchise network. Your marketing plans should include:
- Advertising campaigns,
- Commercials via Radio and Television,
- Internet advertising,
- Social Media,
- Public Relations, and
- Direct Mail efforts.
- Is your Franchise Affordable?
Ensure that your franchise is affordable. Because, if it is too expensive, you will find there will be very few franchisees who can afford to buy into your franchise network.
In conclusion, always be prudent and never make hasty decisions when you are considering franchising your business or company. Franchising your business or company can give you financial security and you can also succeed in expanding and growing your business or company. However, in order for that to happen, you will need to build a solid foundation.
Seek Proper Advice
It is critical as an intending franchisor that you seek and receive the right advice from the very start of you franchisor idea/concept. For this reason, be sure to seek out specialists who have the following skills and experience:
- Business Consultants who are skilled and experienced in franchising, and who can give you competent advice that is relevant to your franchising plans.
- Legal advice from solicitors that specialise in franchising and who can give you and your franchisees greater protection.
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DISCLAIMER: This blog post is of a general nature only and does not constitute professional advice. I strongly recommend that you seek your own professional legal and accounting advice in relation to your particular circumstances.