11 Oct How to Turn Your Business into a Franchise Successfully
With the widespread emphasis on COVID vaccination, we can finally say that we see a little light at the end of the tunnel.
Even so, expanding a business on the tail of a global pandemic seems too bold a move, but if done strategically, will actually increase your revenue streams and plan a head start for when things fully start rolling again. Franchising extends your business to new untapped markets with franchisees that bring local knowledge to make it successful.
Most businesses began as a joint effort amongst friends or family. So, gather photographs, legal documents, and financial records. Reminiscing on your story is great to re-motivate yourselves and to detect overlooked problems. Whether you end up actually deciding to establish franchises or not, this activity will still be useful and enjoyable.
Sit down together and try to remember how it all
began, what changed and what remained.
What went well and what didn’t.
While doing that, consider the three main things to work through when determining if your business would be a good fit for a franchise model.
Return of Investments
Check your financial records and find visually appealing ways to prove your business has been and will continue to be profitable. Store improvement photos and marketing campaign logs are precious evidence that will convince potential franchisees to feel confident in a return of their investment.
How did you correct your past mistakes and can you come up with a simplified model that skips past all the growing pains? Find the simplest way to present a flow of actions that allows your franchisees to jump straight into a fully-fledged business.
You have to understand that you are not quite “selling off” a part of your brand, rather, you are just handing over the authority to run one branch of your business. You have to be prepared to always support and help someone else and ensure they succeed as much as you did.
Feel confident that you have the preliminary considerations sorted? Here are the next three steps you should expect:
1. Develop an expansion strategy
You should also have a checklist to identify target locations, then match them with new franchisees. Some basic market research such as local demographics, supply-demand, housing projects, competitors, and ease-of-access should be done at this stage.
This is where you should collaborate with potential candidates. They offer local familiarity and you offer knowledge of your own business. What would be the best joint decision to penetrate this new market? To change it up a little, or to expand in a more consistent manner?
Put together a growth plan that utilises real data and measurable expected goals.
2. Find aspects that you can simplify
Simplicity means time efficiency, which ultimate translates to cost efficiency.
Streamlining building blueprints, store design, furnishing, marketing tools, promotional campaigns, and management procedures makes your business easily replicable. It’s always easier to just make copies of what you already have, than to think of something new, right? Straightforward guidelines also give confidence to your franchisee because they can just “follow the book” and start in no time, very little thinking and planning required.
Revisit your own growth history and trim out the things that didn’t quite work.
3. View franchising as a shared investment with mutual benefits
As mentioned earlier, you shouldn’t see franchising as “selling-off” parts of your business, but as a pursuit for an enthusiastic business partner. Both parties bring something to the table. You, the franchisor, gain the capital needed for expansion while the franchisee gets your expertise to ensure success.
It is this win-win relationship is the very essence that will lead to tangible growth.
Find a good leader with a clear financial plan and a distinct interest in your business. He or she will now be an extension of your own business personality and brand image. How much they research into your business and how much they reflect your personal vision are good indicators.
Trust your business instinct to tell you if the candidate is serious and is in it for the long-term, not for just a playtime hobby.
If you develop a good franchising guide and find the right people, you’re already well on your way to success.