HELP AND ADVICE ON FRANCHISING YOUR BUSINESS Can your business be franchised?Franchising can be a excellent way of expanding your business. However it may not be suitable for every business. One of our roles is to help you identify if it is right for you.
There are a few rules of thumb that will enable you to establish if, in principle, franchising could be worth considering as an expansion route for your business. Generally… - The business should be proven
- The market should be stable or growing
- The business should be able to be replicated in other geographical areas
- The proposed franchise business must be capable of generating a good profit margin for both the company as franchisor and the individual franchisees
- As a franchisor you must be able to develop and maintain a good working relationship with franchisees because franchising is a working partnership.
Franchising is an important step for you to take, but can offer excellent devlopment opportunities for the right people with the right business. Benefits of franchising- Lower capital investment as franchisees fund their own operations
- Franchisees are totally dedicated, operationally, legally and financially
- Quicker expansion
- Well constructed Franchise Agreement can offer a high degree of control for the franchisor
- Day to day running of the business becomes the responsibility of the franchisee
- Resources required to run a franchise operations are generally lower than 'company owned' operations
Our approach to helping you franchise
Stage 1: Franchise Development
The first step is to confirm that your business model can be franchised and identify how your franchise system would operate. It would look to answer the following questions: - Can your bsuiness be franchised?
- Is franchising the best way forward?
- How would the franchise system operate?
- What are the potential financial rewards for you as the franchisor and the franchisee?
- How would your initial and ongoing income be generated from franchising?
- What resources will you need to build and support a franchise network?
- What are the critical factors of success?
Stage 2: Preparing a FranchiseThe second stage takes you to the point where you are ready to begin marketing the franchise and recruiting pilot franchisees including: - Franchise recruitment procedure and documentation
- Induction training and support programme
- Production of a Franchise Agreement
- Creation of a Franchise Operations Manual
- Franchise territory analysis
- Production of franchisee cashflow and profit & loss forecasts
- Resource analysis for the franchisor organisation
- Production of franchisor profit and loss forecasts
- Advice on setting up and running pilot operations
- Refining package and fee structure
- Refining managment structure
- Refining franchisee profile
- Developing franchise marketing plan and marketing materials
- Briefing franchise depts of the High Street banks
- Assistance in joining the British Franchise Association
Stage 3: Franchisee RecruitmentThis could include: Handling franchise enquiries Carrying out franchisee screening interviews Advising franchisees on business plans and raising finance Training staff and franchisees Troubleshooting General business devlopment
The Costs Involved At this point we can't give you a firm quotation for our fees but we can give you a ballpark figure and a rough idea of the costs involved in franchising your business. After this, if you're interested in principle we can have an initial meeting, following which we can give you a detailed consultancy proposal and a fee quotation.
1. Consultancy FeesOur fees for the complete franchise package work (stage 1 & 2) are likely to be around £15,000. Stage 1 will be around £5,000, with the balance in stage 2. Fees can be paid on a monthly basis, spread over the consultancy period if required. A detailed proposal for all projects is agreed with new cleints prior to the commenement of any work. 2. Other CostsAdditional costs would be: - Legal fees for the production of the legal documentation (notably the Franchise Agreement and a Non-Disclosure Agreement): circa £4,000 - £5,000.
- Production of a franchise operations manual. This can vary according to each business, but a good guide for this would be between £3,000 to £5,000.
- Help with the piloting stage can be linked to recruitment performance
- Production of the franchise brochure - around £1,500 (1000 brochure copies)
- Franchise marketing and franchisee recruitment costs - around £2,000-£3,000 per franchisee.
3. Grant Support You may well qualify for a financial contribution from your local Business Link of up to 50% of the project costs. We can investigate this on your behalf if we get to the point where we prepare a consultancy proposal. The Next StepIf you feel an initial meeting would be worthwhile or would like to have an informal discussion, please complete the form on the 'Contact Us' page or simply give us a call on 01325 251455 and speak to one of the partners - Julie Waites or Ken Rostron. [top of page] |
