Advice on building a successful franchise network
Developing a successful franchise network is a bit like building a house. To ensure that your house is strong, you need to ensure that it is built on firm ground and has solid foundations. Tony Urwin explains
In the world of franchising, the ground you build your network on consists of the preparation you undertake prior to recruitment. For instance, this includes the support systems you put in place, such as personnel, technology and a comprehensive Operations Manual.
The next part of the 'build' is to lay a good set of foundations. These represent the first set of franchisees - the pioneers who will take your business system and prove its viability in a remote marketplace.
Laying the foundations of a franchise system should not be rushed. Many new franchisors fall into the trap of immediately conducting an aggressive recruitment programme in order to recoup the investment they have made in the preparation phase of the development.
They are enthusiastic, eager to enter new markets and develop their brand, and will undoubtedly be experts in running their business.
However, what many new franchisors don't realise is that their business, and their role within it, has changed beyond recognition. They are inexperienced in this new role of 'franchisor' and should not underestimate the amount of work that they will need to put in at this crucial stage of the business development.
SEE EVIDENCE OF SUCCESSFUL FRANCHISEE TRADING
All Trades is a new property repair franchise that was launched in the April/May 2005 edition of The Franchise Magazine. The response to the company's first recruitment advertising campaign was very positive and it was soon training its first three franchisees.
'We were delighted to bring our first franchisees on board and were tempted to continue recruiting,' recalls All Trades Managing Director Keith Roberts. 'After all, setting up the franchise had been a considerable investment and it seemed a shame to turn good applicants away.
'However, Tony's advice was to hold back and concentrate our energy on getting our first franchisees settled and trading at a profit. We realised that all our future prospective franchisees will want to see evidence of successful All Trades franchises out there and, as a new franchisor, we know we're going to have to work hard to prove we are up to the job of supporting our network.
'We're planning our second recruitment campaign and are confident that any creases in our system will have been well and truly ironed out by then.'
SUCCESS DEPENDS ON THE FRANCHISEES
David Little of Ology, a business advice franchise, saw the wisdom of a measured recruitment strategy when the company launched in January 2004. 'Every new franchisee needs face-to-face support, especially in the early stages, so we have to do a lot of travelling, as well as providing support over the phone and through email,' he explains. 'Initially we restricted our recruitment to just four franchisees in the first six months and anticipated building this up to no more than eight in year one.
'We found that we were actually deselecting more people than we were taking on board, but we were determined not to overstretch ourselves and to make sure we only took on the right people. We're now approaching the end of our second year as a franchisor and are beginning to feel much more confident about the recruitment process.
'Our first franchisees are still with us and are developing good businesses. The success of Ology depends on the success of our franchisees, so we're delighted that our strategy has worked.'
CHECK FOR SOLID FOUNDATIONS
While the two franchisors mentioned above have approached their franchisee recruitment with care and a certain element of caution, not every new franchisor will take the time to lay such solid foundations.
Some do have the funding and experience to handle bulk recruitment - the majority, however, do not and my advice to potential franchisees is to avoid franchisors who are recruiting quickly from day one. The chances are that they won't have sufficiently proven the market and will not have ensured that they have the right delivery mechanisms and support services in place to fulfil demand in the long term.