A Guide to the Franchise Process.

Franchising can be a terrific way to grow business and your brand recognition but as a growth strategy it can be a little more complex than many would lead you to believe. The recommended starting point prior to embarking on any franchise development programme should be to engage the franchise experts and establish clearly what is involved in Franchising your business model correctly.

As potential franchisors the following questions need to be considered prior to taking the decision to pursue a franchise strategy;

Q1.  Is franchising right for my business?

Q2. Does pursuing a franchise growth strategy fit with the overall business strategy and help you deliver on the Mission and Vision for your business?

Q3. Are you right for Franchising your business?

Franchising is not for everyone. Do you have the personal characteristics to be able to let go of your brand and proven business model and entrust it to independent franchisees? If you can’t it may cause significant relationship difficulties with your franchisees into the future. As independent business people when buying a franchise, franchisees are simply buying an opportunity to run their own business to your prescribed proven business methods, receive full training in how to successfully operate that business and benefit from access to your expertise and ongoing support.

Q4, Is your business capable of being franchised;

You can’t franchise an idea; it must be a proven business model with real substance and a proven track record behind it. First and foremost, question have you proven your business model to be financially successful. Notwithstanding the business model is financially viable the next question is to examine once you decide to franchise out the business model and you apply the intended franchise fees to the franchise model how does that affect the potential earnings for your franchisees. Once you are satisfied that the financials still stack up then the following steps need to be taken in constructing your franchise programme correctly.

There are three distinct stages to running a successful franchise programme; Proper management of each of these stages is crucial in delivering a successful franchise strategy for your business. These are

·         Constructing the franchise model to best practice standards.

·         Implementing the franchise programme correctly and

·         Successfully managing the franchise programme on an ongoing basis.

Stage 1 “Constructing the franchise programme” will be addressed in this article.

Constructing the franchise 

The following elements need to be covered in constructing your franchise correctly.

  1. Develop the Legal Agreements: The purpose of the agreement is to protect your franchise and frame the relationship between the franchisor and the franchisee. Solicitors with specific franchise expertise are a must when documenting the contracts as franchising differs somewhat from standard commercial contracts.
  1. Document your Operations Manuals:  Systemising your business model and documenting all aspects of “what must be done” by your franchisees to successfully replicate your business model, protecting your brand and intellectual property.
  1. Develop your Training Curriculum: Agrees what areas of the business model the franchisees must be trained up in and develop an appropriate training modules and methodologies.  
  1. The Marketing Collateral: Remember good franchises are not sold they are bought The marketing collateral required will be two fold. Firstly, you will need to develop your franchise prospectus to attract suitable franchisee candidates and secondly you will need to develop a suite of marketing support material to be made available to assist the franchisees promote their business locally.
  1. Agree and resource up your programme of Continuous On-going Support.   Decide on your programme of support is to be provided to your franchisees. What initial hand holding support will be needed and what support is to be provided on a continual and ongoing basis to convert your franchisees into advocates of the franchise.

 Finally pursuing a franchise strategy must not be viewed as an add on to your existing business strategy. It must be viewed as a separate and distinct business in itself and needs to be resourced up accordingly.

©David Killeen

Chairman – Irish Franchise Association

Managing Partner - Killeen & Associates Franchise Specialists.