Urwin's View: Are you prepared for franchising?

Transforming a business from a stand-alone or corporate operation into a franchise network may seem like a simple project to some. However, many new franchisors soon discover that it involves much more than they anticipated. Tony Urwin reveals the challenges you should prepare for, before franchising your business

Franchising a business takes a surprising amount of patience and determination. You'll need to be able to focus your time and attention on the project during the formative stages, and you'll need access to significant financial resources. The decision to franchise is one that needs to be taken with the full co-operation of your business partners, as all your lives will be changed dramatically as you work together to ensure the correct systems and backup are in place for the benefit of all concerned, and especially for your future franchisees.

From the very beginning, seek advice from a reputable Franchise Consultant. No matter how much you know about franchising already, you will be busy running the existing business and there is a high possibility that, without the focusing presence of an advisor, something of major importance will be forgotten.

One of your first tasks will be to ensure that you own the trademark for your trading name and logo. Contrary to popular belief, using the limited company name does not make you the legal owner of it and without registration you could leave yourself susceptible to passing off (other companies using your tradename and logo) as you develop your brand. Registering your trademark proves to potential franchisees that you place a high value on your brand identity. They will then understand the reason why you are charging them for the privilege of trading under it.

Time spent in consultation with an experienced advisor will ensure that you understand the processes that need to be completed and that you have all of the professional documentation that, apart from being a practical necessity, will add credibility to your franchise. This includes the following: a Legal Agreement written by a lawyer who specialises in franchising; a prospectus which is concise, informative and demonstrates the personality of the business; disclosure documents that provide sufficient information for the prospective franchisee and an operations manual that sets out your procedures in a clear and understandable style.

Producing an operations manual is a time consuming and painstaking task. Businesses without a skilled in-house copywriter are advised to seek professional help from an experienced manual writer.

If you're not already running an operation in a similar way to the proposed franchise business you should set up a pilot franchise. The pilot operation will need to run for at least six months in order to prove to all concerned that the business concept is capable of successful replication. Once the pilot is running successfully, potential franchisees are more likely to be satisfied that they will be working with a credible franchisor who has the experience to help them to develop successful businesses themselves.

It is essential that your first franchisees are well trained, motivated and confident. Select people who will be prepared to work hard to make their business succeed and you will find that their success helps you to attract further franchisees. This is where your self-discipline will really pay off. Taking the time and care to award franchises to the most suitable individuals may mean less money in the short-term, but this will be repaid with interest once the right people are brought on board.

Having started to build your network you need to make sure that the first franchisees are working well before you recruit more. A measured recruitment strategy will allow you to test and improve the efficiency of your franchise system and will give key staff time to increase their confidence and franchisee management skills. A network that is built up step by step, with care and consideration, will prove easier to adapt and expand than one that grows beyond the franchisor's control.
Bringing in too many franchisees in the first couple of years has been the downfall of many promising franchise systems.

Franchising is a proven method of business expansion. Achieving this success, however, will take hard work, requiring both persistence and financial commitment for the long-term. You'll need to ensure that you have a motivated and committed team behind you to drive the project forward. Your chances of franchising success can be greatly enhanced by complementing and expanding your in-house skills by enlisting the services of franchise professionals from the outset.

Franchising is not a get rich quick scheme and it's not for the faint-hearted - are you still up to the challenge? If so, let's discuss it today!