General

Planning to Franchise

The New Year is often the time for reflection and thinking about plans for expansion in the year ahead. Franchising is one of a number of ways that businesses can grow and flourish, yet although most people are aware of franchising, McDonalds, Prontaprint, etc. etc. there is more to it than at first appears. That is where The Franchise Company can help you.

Franchising is a kind of partnership where the franchisee buys into the franchisors know how and commercial success rather than attempt the ‘learning curve’ themselves. In return the franchisee pays a fee for the initial and ongoing support they receive from the franchisor. The combination of the commitment and other benefits each of the parties bring can make a well run franchise model unbeatable.

So how do potential franchisors get started?

By seeking professional advice from The Franchise Company to identify the feasibility and potential rewards of franchising their particular business model, together with the issues and potential pitfalls to be avoided, including,

  • The business model should be ‘tried & tested’ with effective operating systems
  • Your market place should be stable or growing
  • The business model (products or service) should be able to be replicated in other geographical areas of the UK and the base operating skills and ‘know how’ should be capable of being transferred to others (franchisees) via a training and initial support programme
  • The senior management team should be fully committed to franchising
  • The proposed franchise business must be capable of generating good profit margins for both the franchisor and franchisee
  • To achieve the consistently good levels of performance the franchisor must be able to develop and maintain a good working relationship with the franchise network so that both parties benefit from the others contribution
  • Good communications are essential, and as the franchisor owns the ‘know how’ and other intellectual property connected to the franchise the onus to achieve good communications rest with the franchisor.
  • Each franchise model will have specific elements that have to built into the business structure and are often referred to as their unique selling points.

    • We also know from experience that cutting corners in franchising is usually at the expense of sustained long term success.

    A staged approach to franchise development projects usually works and limits your financial exposure. There are usually 3 stages to complete;

    Stage One…

    is the development of the franchise package and operating system with all documentation. At the end of that stage you’ll be ready to start recruiting.

    Stage Two…

    deals with recruiting the first few franchisees to test the initial training and support programmes, and to monitor the franchisees actual performance.

    Stage Three…

    is roll out across the UK and perhaps even overseas, after the second stage is considered successful.

    The cost of creating the franchise model will vary significantly depending on the complexity of the business model to be franchised.

    But it’s not all bad news because a properly constructed franchise package will enable you to be competitive in the recruitment marketplace, and generate a contribution to the investment costs associated with creating your franchise business model.

    Contact Ken Rostron or Julie Waites to discuss your opportunity in more detail.