Important Considerations for Successfully Franchising Your Business
Franchising can be a highly advantageous way to quickly grow your business. Unlike expanding on your own, franchising creates a mutually beneficial arrangement where franchisees will bear a great deal of the cost in exchange for an established brand and proven systems.
If you’ve been considering expanding your business via this model, the first step is to determine that your business is a good fit for franchising. Once that is determined, there are a number of important early considerations to take into account before you move too far into the process.
Creating a Business Plan
One of the very first things you should do is to sit down and create your franchise business plan. There are instances where a business plan will be required, such as applying for a loan or appealing to investors to secure the funds needed to develop your franchise model. However, even if this is not the case or you are not yet at that point, creating your master plan is crucial.
The franchise master plan will lay out your strategy for franchising the business and allow you to evaluate the ability to reproduce operations in other markets beyond your current location(s). The process of creating your franchise business plan, or master plan, forces you to think through all the main aspects of your expansion. It is through this process that many opportunities, as well as foreseeable obstacles, will be identified. This allows you to make better decisions as you move through the process.
Developing Your Brand Story
A common mistake made by even the largest franchises is not fully understanding, developing, and communicating a brand story and unique value proposition. It is through a cohesive, well-constructed brand story that truly effective marketing is possible. Remember, one of the main elements of a successful franchise is a unique concept. It is not enough for you yourself to see it, you must also be able to communicate it to the outside world.
Determining Your Vetting Process for Franchisees
It can be tempting, especially when you are initially launching, to accept any potential franchisee that can come up with the initial investment. However, that short-term thinking can lead to major issues down the road. Your franchisees become an extension of your brand and are also responsible for whether their franchise location(s) succeeds.
Before you start seeking franchisees, you should know how you are going to evaluate them. At a minimum, this should include reviewing their education, prior work, and management experience, and running a criminal background and credit check.
Selecting Legal & Other Professionals
You don’t just need to do your due diligence when it comes to potential franchisees. That same level of scrutiny should apply to the franchise lawyers and other professionals you will hire. You should be looking for professionals that are specifically knowledgeable and passionate about franchising.
In most cases, especially with legal counsel, you will work with them continuously. It is advantageous to spend time upfront selecting the right people that you will want to work with for the long term. It is much easier to work with professionals you already have an existing relationship with, instead of seeking out a different one every time you need something. The previous insight and knowledge of your business will make their work even more effective.
Hiring an Outside Franchise Manager
One of the early questions you should be asking yourself is who is going to manage the franchisees? They will require ongoing training, support, and regular communication. In most cases, in order for the role of franchise manager to be done effectively, it must be a full-time job. As the founder of your business, you likely already have your hands full.
It’s also possible you may not be interested in acting as franchise manager, or you might not have the organizational and communication skills the role requires. You will want to decide early on if you will give up other responsibilities so you can fill this role or if you will hire someone. If you decide you will hire a franchise manager, you should ideally recruit them early on so you can utilize their expertise to help you create a winning franchise model.
Taking the time to consider the above will lead to a stronger franchising plan. And Joorney is here to support you throughout the franchise process! Our skilled business plan writers can help you create your franchise master plan, prepare you to seek outside funding, or adapt your existing master plan for a specific franchisee. Our advisory team is also able to conduct thorough market research and create your sales and marketing plan, as well as offering several other valuable services to ensure your franchising success.
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