Franchising: Expand a business nationwide or worldwide

Franchising: A practical and profitable way to expand a business nationwide or worldwide...Drawing on 25 years of experience in the franchise industry, Professor Roy Seaman recommends how you should ascertain whether you have a business that could expand by franchising.

Franchising is a significant marketing method and revenue enhancement strategy in today's world of business. Franchisors harness the brand equity and proven know-how of their intellectual properties while franchisees provide local expertise and industrial knowledge for more rapid market penetration of the given product, service, image and brand.

Under franchise agreements, franchisors license their Intellectual Property Rights (legally protected trademarks, servicemarks and copyrighted frameworks for doing business) in a specific territory, in exchange for an agreed payment of royalties or service management fees from the franchisee. Often franchising can generate increased sales with reduced risks and financing, with all parties collaborating to identify the best strategy to overcome the market challenges via each other's strengths.

Franchising represents a cost-effective means of expanding a successful business, from a regional base to a national, or indeed international, market. If you are attracted by the prospect of developing your own franchise, whether by developing a franchise package based on your own established business or by investing in a Master Franchise for the UK from an international franchisor brand, franchise consultants can offer a proven approach to the Franchise Development Programme. At Franchise Development Services, we offer clients a comprehensive programme to take them from evaluation, through development, to implementation.

Phase One - The Evaluation Analysis and Outline Franchise Development Business Plan
Here your franchise consultant will need to look at whether franchising is a viable mode of expansion for your business by weighing up how much more value is created if you run the business as a franchise as opposed to generating your own growth. To do this the consultant will need to review your business strategy, conducting market and feasibility studies and propose a business plan for franchising.

The consultant will recommend how to customise your business concept or processes to suit the demands of franchising, and evaluate the cost of implementing the franchise concept and framework. Once the Franchise Development Programme has been costed the consultant will be able to recommend the fee structure for franchising to cover the costs of providing the franchise package.

Phase Two - Structure and Franchise Framework Development
Once an informed decision has been made to commence the development of the franchise, the consultant will look to advise on the optimal operating structure and model for the franchise arrangement. A strong framework must be constructed to manage and control the business, and the consultant will help in producing a comprehensive range of deliverables to ensure a turn-key franchise programme, including:

  • operating systems and manuals;
  • marketing plans for franchisee;
  • recruitment processes;
  • franchisee performance management and reporting systems;
  • legal agreements;
  • franchise revenue models and fee structuring;
  • franchise and brand valuations;

Phase Three - Implementation
During implementation the franchise consultant will outline the operational details required to guide franchisees and maintain consistency in franchise operations. This includes developing the metrics to monitor performance of franchisees, and ensuring the franchise agreement has captured all the essential details of the business interests. Once the correct franchise governance structure is installed, the consultant should then assist in the process of sourcing, evaluating and recommending franchisees.

At Franchise Development Services, our range of franchising services is tailored to address various challenges faced by your organisation at the different stages of franchising. We are recognised as the world's largest professional franchise development organisation, drawing on the knowledge and skills of more than 100 people in 21 offices covering 14 countries. We build valuable relationships by providing services based on quality and integrity, and aim to help you achieve better results within the shortest possible timeframe.

Roy Seaman is an Honorary Professor of the International Franchise Academy of the Beijing University in China. He is also Managing Director of Franchise Development Services, a franchise consultancy (and publisher of The Franchise Magazine) which has been assisting in the development of franchises around the world for 25 years.