How to Start a Franchise
How to Start a Franchise
When you franchise your business, you are in effect transitioning into a new business model. There are a wide range of great benefits to franchising your business, but also potential negatives if the process is not prepared for thoroughly and the responsibilities that come with being a franchisor fully understood. To franchise a business effectively, the business owner needs to have a general vision for growth and a goal to scale the business. Franchising is not a business for “operator” mentality, great franchisors have made that mental transition to a true business leader and are focused on growth. So what do you need to do in order to get your business ready to franchise and how do you start to franchise your business efficiently?
1. When considering franchising, it’s important to understand the market potential for your product or service. Is what you sell or offer in demand outside of your immediate area? Are you in an industry segment that has potential for growth? If what you are seeing is more market potential than you can cover with your corporate business resources, franchising could be a potential way to scale the business and address the market opportunity.
2. To Franchise your business, you need vision. Vision is something bigger than what you will do today, the coming week or month and even bigger than what you will do in your business in the coming year. Vision is where you will take the business in the future. Franchising is a strategic vehicle used to build something bigger than any one person could do on their own. It incorporates relationships with a large number of people which requires leadership who understands and is willing to sacrifice for the bigger picture. Franchisees invest in companies that have a pathway to the future that benefits all parties involved and offers value to them as individual unit owners. Good franchisors see opportunities to grow and know how to execute in a way that will take the company in a positive direction and all it’s participants with it.
3. Franchising requires systems and processes. When you franchise your business, you duplicate the business with people who in many cases are buying a franchise to learn the business. They frequently have no experience or knowledge in how to operate the business and expect the franchisor to support their learning and understanding for how to do this successfully. Good franchise models can do this and have the technology, operating processes and business expertise to teach others how to be successful operating a location of the franchised business model. You should have documented processes in place, a POS system, good accounting processes and strong marketing mechanisms that can be replicated effectively.
4. When you are getting ready to franchise your business, you should have a Brand. Brand is a large, wide and deep term which if you ask an advertising executive what this means, you could get a variety of answers. From a franchise perspective, you can narrow this down to several key aspects of your company’s image and customer presentation. First, have a great logo that says what you want it to say and looks like a professional image for your company. Second, have an excellent website and digital presentation, regardless of your industry, you need to have a great presentation on the web for who you are and what you do, every potential franchise investor will be evaluating this and looking at your site as part of their franchise investment decision making process.
5. Before your franchise your business, know your numbers and the financial side of your business model. If you don’t already, get on an accounting system like QuickBooks or hire a bookkeeper to keep your numbers in order. Then spend the time to review and understand the financials. These make up the “Bones” of the business and will be critical in your ability to duplicate the business through franchising. The better you understand these numbers, the easier it will be to support others in being successful operating their own location.
6. When considering whether to franchise your business, you should have a solid marketing plan in place for your business model. New franchisees who invest in your business will be opening in markets where your brand isn’t necessarily known, they won’t have existing customers in place and will need to drive traffic to their franchise. As the franchisor, you will be expected to help the franchisees of your business get their marketing plan moving. Know what works to drive customers in, have a validated marketing and business development strategy in place so that you can confidently present a franchise marketing system that will support franchisees in being successful.
For more information on how to franchise your business and what aspects of your operating model should be in place to consider franchise development, contact Franchise Marketing Systems for a franchise consultation. Our team of franchise consultants can provide direction as to whether you and your brand could consider franchise growth and what to expect from the franchise development opportunity.
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