It can’t fly without a pilot
Franchises, like planes, need pilots to take off safely. While fliers instinctively wait for the captain, franchisors don’t have the same sense of self-preservation when it comes to field-testing their new franchise
Too many aspiring franchisors presume that the success of their operations proves the viability of their franchise. Not so. The franchise development process, if done properly, will simplify, streamline and systematise their operations to make them easier to replicate.
The branding, trading style and many business methods may be refined or modified as part of the process. The result is a franchise business that is often better thought out, more efficient and better looking than the original business.
The franchise business will differ in other significant ways. It will be designed to be built from a package. Its owner-operators will be provided with instructions and guidance. The business will face different costs, including Management Service Fees, National Marketing Contributions and, quite possibly, finance repayments that were not part of the original business model.
The process of franchising builds a business that is similar to, yet still notably different from the business being franchised. This new business must be properly field-tested before it is sold to ensure that the franchise that is brought to market is the best it can be. You won’t get a second chance.
This is where pilots come in. A pilot franchise is a real-world trial of a new franchise model by third-party owner-operators. Pilot franchise owners are typically enterprising individuals who are willing to accept higher levels of risk and uncertainty in return for some financial advantage (e.g. a discounted franchise fee) and professional consideration (i.e. extra business support).
The pilot franchise owner’s task is simple: establish and grow the franchise business following the franchisor’s guidance. Practical experience will demonstrate whether the franchise business can become sustainably profitable, and whether the provided package, training and support are appropriate.
If the model works, the franchisor gets more than validation. It gains proof that the franchise business can provide a good return on investment. It gains raving fans that are likely to sing its praises. It gains an income stream to help fund its franchise marketing.
I advise every client of FDS North to plan for piloting from the outset. That means from our first free initial meeting, through the detailed franchising business development plans I prepare and into the franchise development process. The fear of mis-selling or a failed market launch should always be greater than the fear of losing first mover advantage.
Piloting needn’t take years, but at least six to 12 months of trading is essential. A franchisor’s patience is almost always rewarded. Kinks may be worked out before they become serious issues, and the necessary support staff and resources can be put into place and tested. The result is a more market-ready and competitive franchise offering.
Any franchise consultant that doesn’t encourage you to pilot the franchise you want to build should be viewed with suspicion. They are concerned about gaining your business, not helping it to grow. Think of yourself in an aircraft. You want the confidence of knowing you have a good pilot.
Doing it right may take a little more time, but the reward is a greater chance at success. If you have any questions about sustainable franchise development contact FDS North today.
Written by Tony Urwin