Nine Important Tips For Owners Looking To Franchise Their Business
Some founders start their business with the goal of eventually turning it into an expansive enterprise through franchising. Others consider the possibility only after realizing their business model is successful enough to be replicated and licensed to others.
As the franchisor, the founder of the original company retains ownership of the brand and its trademarks. Franchisees pay for the use of these elements as well as access to the proprietary knowledge and processes they’ll use to operate their own small businesses as part of the chain.
While giving other aspiring entrepreneurs a safe way to buy in and open their own locations is a popular method of business expansion, many aspects of launching a franchise can be confusing. Here, nine members of Forbes Coaches Council each share their top piece of advice to help prospective franchisors understand exactly what they’re getting into so they can take the right steps.
1. Ensure Franchisees Are A Good Fit
Don’t lose sight of your brand’s vision, values and mission. What is the legacy piece that is being established? Not every franchisee will be the right fit for the organization. Don’t be afraid to go against the tide in order to maintain the integrity of the business. – Claudine Reid, PJ’s Community Service
2. Create And Find Alignment Around Your Values
When creating a franchise, make sure that you are capturing the essence of your brand, including the values and principles that drive it. If you’re not 100% sure about what these are yet, then survey your clients first to get a more in-depth understanding of what “makes” your brand for them. – Rajeev Shroff, Cupela Consulting
3. Revise Your Operating Agreement
In addition to legal advice, you need to have a clear vision and revise your operating agreement in order to avoid future misunderstandings. Growing and introducing new models is exciting, but it requires planning and optimization of the entire organization. I would recommend being certain that you understand what this new model will change about your current operation. – Michelle de Matheu, The Mind, Body & Soul Stylist
Forbes Coaches Council is an invitation-only community for leading business and career coaches. Do I qualify?
4. Get Advice From Franchise Consultants
Franchise consultants can be lifesavers. Find others who have been successful and pick their brains about what you need to do and how to move forward with confidence. Then find an attorney who is well-versed in this language and find out what you need to do from there. Most of all, let your business plan and your “why” lead the way as reminders of what to focus on when things get hard. – Jen Croneberger, JLynne Consulting Group
5. Assess The Human Capital Components
When looking to franchise, business owners often focus on the many legal, financial and operational considerations. But don’t forget to also assess the human capital components as well. The success of any organization is derived from its people. – Jonathan H. Westover, Utah Valley University & Human Capital Innovations, LLC
6. Build A Profile Of The Ideal Franchisee
Build a profile of the type of franchisee you want to join your company. Often, this part of the process isn’t articulated well, resulting in franchisors changing many of their decisions back and forth and possibly making the wrong choice. The clearer you are, the easier it will become to select the desired franchisees who will continue to build your successful brand even further. – Arthi Rabikrisson, Prerna Advisory
7. Ask Potential Franchisees The Right Questions
Are prospective franchisees really buying into a scalable business that will give them the freedom they want? Or would they be purchasing a job they cannot quit when they’ve had enough, as they did in previous roles? Reflecting on the distinction between the two concepts can help franchisors ask potential franchisees the right questions and make the best decisions. – Csaba Toth, ICQ Global
8. Seek Guidance From Serious Specialists
You must hire a franchise consultant and an attorney associated with helping create franchises and align all of your financial partners. These great ideas don’t need to be posed to anyone except people who are serious and have a track record of seeing concepts through to completion. This way, you don’t get generalized guidance on your path forward and can protect your confidentiality, which is crucial at this stage. – John M. O’Connor, Career Pro Inc.
9. Stay On Top Of Recruitment Needs
Every franchise has ongoing recruitment needs that the franchisor has to keep their eyes open to. This is the hard part of franchising. There is so much turnover that, whether you are the owner of the franchise or a franchisee, you have to understand the obstacles that persist. Meet these challenges head on, with eyes wide open, and always be recruiting. – Jon Dwoskin, The Jon Dwoskin Experience