How to become a franchisor
Owning a successful business is completely different to owning a successful franchise network.
This may seem like an obvious statement to make, but the franchise industry is littered with the corpses of franchises that have failed because the franchisor was unprepared for the commitment and dedication needed to own a successful franchise.
If a business owner wants to prevent their franchise from becoming a failure they have to acknowledge that there are no short cuts to building a thriving network of franchise owners, instead it involves an investment of time, energy and money.
One important factor to take into account is that, on top of continuing to operate their own business, a franchisor is responsible for implementing the systems that will help their franchise owners to run profitable businesses. This will include providing relevant and comprehensive training, ongoing support, and a detailed operations manual.
It is also vital for franchisors to be prepared to invest resources in their franchise owner recruitment campaign. Although a franchise network is made up of a number of individual franchise owners, clients and customers will usually only see the brand as a whole unit, meaning that if they receive a bad service in one location they will judge the entire network. This not only impacts on other franchise owners but also on the brand’s reputation.
Franchisors need to have confidence that each franchise owner will not only work towards making their own business profitable, but also for the benefit of the franchise as a whole. Therefore, during the franchise owner recruitment process franchisors should ensure that they only award franchises to those who can prove they have the skills and dedication needed to do this.
Furthermore, so that each franchise owner recruited is provided with the highest level of training and support, franchisors should not expand too quickly. Although rapid expansion (and the increase in monthly budgets due to franchise fees) may seem appealing in the short-term, in the long-term a network of badly trained and unsupported franchise owners will have a negative impact on the brand and probably end in the franchise failing.
Although expanding a business by franchising may seem daunting, there are many services and events within the franchise industry that are designed to assist would-be and new franchisors.
Before starting the process of franchising, many business owners will hire, or at the least speak with, a franchise consultant. There are numerous franchise consultants in the UK who are experienced in aiding franchisors in establishing franchise networks.
It is advisable for business owners to speak to a number of consultants before choosing which one they feel they will benefit from working with the most. Partnering with the right consultant is important as they will be involved in every aspect of establishing the franchise – from writing the operations manual to providing advice on which is the best media to target when advertising for franchise owners. Even once the franchisor has started recruiting franchise owners, the consultant will usually be on hand to offer help on growing the network at a steady and manageable pace.
Another benefit of using a franchise consultant is that most will have contacts in sectors that provide a vital service for franchisors, such as franchise lawyers. These contacts will save the franchisor time and energy in having to establish relationships within these sectors with no initial points of contact.
As well as using the services of a franchise consultant many business owners find franchise exhibitions and seminars a good source of information on franchising a business.
Companies, such as Franchise Development Services (FDS), hold seminars throughout the year specifically aimed at business owners looking to franchise their business. The seminars run by FDS are half-day events, which are hosted by bfa-Affiliated FDS consultants and cover a range of topics including: three ways to franchise a business; estimated timescales and budget requirements; the importance of the evaluation analysis; and what laws relate to franchising.
At many of the franchise exhibitions held in the UK there are usually seminars and talks aimed at providing business owners with an insight into what it is like to be a franchisor. Usually, attending major franchise events are representatives from the British Franchise Association (bfa) and franchise consultants, who will normally be willing to talk to would-be franchisors.
If a business owner thinks that franchising simply involves recruiting franchise owners and providing them with an operations manual to follow, they need to seriously re-think whether this is the right way for them to expand their brand. The only way a business can be successfully franchised is if the franchisor is prepared to dedicate their resources into recruiting, training and supporting their franchise owners to ensure each one has the knowledge and backup to create profitable and thriving businesses.
Written by Derin Clark