The ABC of Franchising

Based on many years of experience helping businesses to expand by franchising, FDS Southern provides a proven and effective system for guiding clients through a development programme based on three key phases

Franchising your business can result in failure if you do not follow a carefully structured programme. After an exploratory discussion and having been satisfied in principle that the business concept is sound and franchiseable, we then implement the strategy for success.

Phase A: On-site evaluation of client’s business concept meeting objectives:

  • Full appreciation of core/related business activities
  • Securing data on the entire business method
  • Securing relevant financial data
  • Brainstorming ideas for possible franchise structure
  • Understanding client aims plus management resources
  • Securing data for a franchise development programme

We then undertake the agreed work programme over a three to four week period to generate an action document that comprises detailed guidelines for franchising the business.

Action document:

  • Key conclusions for successful franchising
  • Key elements and itemised costs of franchise package
  • Recommendation on licence fee to be charged
  • Financial projections for franchise owner territories
  • Critical assumptions underlying these projections
  • Type of franchisor support structure needed
  • Ongoing fee structure between franchisor and franchise owner
  • SWOT Analysis on franchising the business
  • Recommendations and ideal plan of action clearly identifying the best way to franchise the business

Another meeting follows to present and discuss the contents and clarify the best way forward.

Phase B: Preparing the infrastructure

This second phase adheres to a work programme to produce the infrastructure for successful franchise development.

Work programme:

  • Intellectual property rights protection
  • Identifying support services
  • The franchise package
  • Preparing financial statements
  • Fixing initial and ongoing fee structure
  • Production of an attractive franchise prospectus
  • Producing the franchise information memorandum
  • Producing the franchise manual
  • Producing the legal documentation
  • Designing franchise owner training programme
  • Finalising corporate image elements
  • Strategy for franchise owner recruitment
  • Procedure for handling franchise owner recruitment

In this implementation phase, we work with solicitors, accountants, trademark attorneys, PR executives, advertising and editorial personnel, corporate design experts and other professionals to ensure the creation of an attractive and professional franchise offering.

Objectives:

  • Credible and professional corporate image
  • Clear and inviting franchise prospectus
  • Legal agreement fair to both parties but leaving you in control
  • Franchise manuals for the entire business
  • Territories benefiting both franchisor and franchise owners

After the second phase, the new business format should be ready for a professional and confident launch as a franchise.

Phase C: Franchise owner recruitment

This involves marketing a franchise to secure quality prospects to own and operate it. Consolidating the first phase of franchise owners is vital to laying the solid foundations for franchising success.

We would, therefore, stress the importance of allocating the franchise to parties of the right calibre rather than just those with the capital to invest. The key is helping you, the franchisor, to design eye-catching advertising that portrays the opportunity accurately and effectively to attract quality prospects.

Having generated enquiries, we then teach your management team how to invest time and patience in handling your enquiries correctly.

Our in-depth industry experience helps clients to avoid the common mistakes at every stage and move on steadily to enjoying the benefits of franchise development success.

Written by Gordon Patterson