Franchising a Business
Franchising works. It’s been proven worldwide. And there are now over 900 franchised systems operating in the UK today. There’s something for every skill and investment level too: from carpet cleaning to loft ladders, and from global burger chains to businesses that can be run from a garden shed.
If you have a successful business of your own, then you could consider franchising as a way to expand. It’s a strategy that has helped plenty of small businesses grow into national – or even international – brands.
But how do you franchise a business?
To begin with, you need a business that can be franchised in the first place. And to help you determine that, here is a simple five-point checklist:
- Is your business profitable?
- Do you know why people buy from you?
- Do you know which marketing activities get the best results?
- Could you show someone else how to run your business?
- Will people in other parts of the country buy from your business?
Clearly, there’s a lot more to franchising than just that. But if you can’t answer those questions positively then, unfortunately, you’re not quite ready.
How do you franchise a business if it isn’t making any money? A franchise definitely isn’t a quick fix for an ailing business. And how do you franchise a business if it can’t be transferred to other people or other regions? After all, that is the essence of franchising.
But if you can answer those questions positively, what happens next?
How do you franchise a business the right way?
It might seem obvious but, before you do anything else, you need to make sure your existing business is rock solid. Growing too fast without the requisite support and funding could be catastrophic. And the last thing you want to do is destroy your life’s work.
How do you franchise a business without wrecking what you’ve worked so hard to build?
You must have a sound business with an infrastructure that can accept growth. That doesn’t mean you have to take on dozens of staff members right away. Nor does it mean you have to invest in state-of-the art offices with all the executive toys.
But you’ll probably need more than you have at the moment. Which will cost you money. And while you don’t need millions in the bank, you will need to set aside thousands. In fact, to do this the right way, you’ll need to invest tens of thousands over a period of time.
So how do you franchise a business without bankrupting yourself?
You need a Business Plan. And it’s at this point that you’d do well to heed the advice of industry experts. People who know franchising inside out. Franchising stalwarts who’ve seen the good and bad come and go.
The good news is there are lots of resources within the franchise industry. The British Franchise Association (bfa), lawyers and accountants, and dozens of franchise consultants dotted around the country are all on hand to help you.
For a price, of course.
You can attend seminars at the bfa that will cost you less than one hundred pounds. But consultancy, legal and professional financial advice will cost you a great deal more. It’s money well spent, though, to ensure you franchise your business in the correct manner.
Why it can’t be all about you
Is your business all about you? Are you the magic ingredient that just couldn’t be replicated? Because how do you franchise a business if it won’t work without you? How do you franchise a business if you are that business?
Is your business so inextricably linked to you and your expertise that it would take years for somebody to learn? A franchise must be something that you can teach other people to run. Not anyone, but at least some people.
All entrepreneurs believe in their business, and they believe in themselves. That’s what makes them successful. And that’s what separates them from those that choose the relative safety of a nine-to-five salaried career.
But can that belief be passed on to others?
If you’re a successful business owner, you know your business is great. You can win and retain customers. You can overcome any objection and leave the competition floundering in your wake. You wake up every morning, or at least most of them, with passion and zeal ready to overcome any hurdle that’s in your way.
But could anyone else? And could you show them how to do it?
Admittedly, it’s unlikely you’ll find franchisees quite as passionate about your business as you. But that doesn’t mean you can’t franchise. You’ll just need a business that has a proven model, intensive training, sufficient support and an infrastructure that will ensure investors can make a success of it themselves.
A transferable business
What sector do you work in, and how niche is it? How long has it taken you to master your daily activities and turn a profit? And do you have any competitors?
Because how do you franchise a business if you’re the only one doing it?
You need to find out whether your business will work in other areas. Whether it really is transferable. If you have a business with customers, then it’s fair to assume people in other parts of the country will be customers too. But you can’t be sure until you test it out. And that’s why most franchisors run pilot operations before rolling their brand out nationally.
Launching a franchised business takes careful planning; maintaining a successful franchise takes even more. So how do you keep franchisees motivated and making money, keep them true to your vision and ensure no ‘bad apples’ can damage your brand?
How do you franchise a business and protect your intellectual property?
Strong franchisors have franchise agreements written in their favour. It’s one of the most important investments you will make. It safeguards your business.
As you can probably tell, franchising isn’t the easy option. And it’s not one to be taken lightly. But done properly, it can be the perfect vehicle for you to expand your business, and for others to benefit from your brand and operation.