10 Key Points to Franchise your Business
Undoubtedly, Franchising is one of the key business strategies which aids the Franchisor to rapidly establish and grow the business in the newer markets. Having said that being a franchisor is not an easy endeavor where you can rush into. With due diligence and efforts, you would have raised to this position, and franchising a business is the crux of the matter where you should stabilize your current position as well as the balance between the newly commenced venture.
Franchising a business is driven by a combination of several factors such as budgeting and analyzing the up-front cost, amalgamating with reliable franchisees, proper filing of the legal paperwork, scheduling the royalty payments, and other legal operations of the business. With no space for doubts, Franchising is no piece of cake unless you play your cards rightly. Here in this blog, we have jotted down 10 key points that you must consider while you are planning to Franchise your business.
Analyze whether Franchising is suitable for your Business: Firstly, we should understand that Franchising is not suitable for every type of business. Though Franchising helps in expanding the territory of your business and generate new revenue streams to the businesses it also equally has the downsides when you don't put in the required time and efforts. The hidden expenses are the major drawbacks of franchising a business.
Apart from these monetary aspects, find out whether your business can be adopted by someone who is completely novice and how far they can adopt the business nature and perform efficiently if given a chance. In case if you have proven track of Franchise earlier it would be easy for you to allow the time and resources adequately. If it is your debut try then it is truly a challenging phase where you must consider many things. First, you must ensure that your business is not limited by any geographical or cultural barriers. Most importantly whether your business has the required brand recognition and that can attract new and more customers to the business. To begin a Franchise business it is more important to be recognized well in the market.
Maintain a Good Track History: Before opting for a Franchise Business, a Franchisee would surely look through the complete company's history through various resources. Also, the franchisee will keenly research on the office and management system and also survey your stability and experience in the market. It is preferable to have a good brand reputation for your franchise business in the online market. Initially, a Franchisee while searching for different Franchise businesses will surf through reputed online portals like FranchiseReviews.in. It is important to have a more positive review of your brand in the online portal. Having a more genuine number of positive reviews for your business increases the credibility of your brand in the franchisee's mind.
Clear Franchise Plan: A business can perform better only when its plans are devised properly. Similarly, to begin a Franchise business you must have a clear map and appropriate reasons why your business is suitable for franchising and how it is going to perform once it has decided to begin a franchise business.
Your business must have a SWOT analysis - Strength, Weakness, Opportunities, and Threats that you will endure during the new venture. It is necessary to have the right financial forecasts, budgets, timelines, and marketing strategies that are intended for the growth of the overall business in the upcoming years. Also, it should have a clear idea of the monitoring process of the employees as well. Having a clear Franchise plan helps in anchoring your business in the long run and leads to a successive path subsequently.
Follow a Standardized Business process: The key to success for a franchise business is that there should be a standard brand and service consistency across multiple franchises in different outlets. It is mandatory to establish a standard business practice and procedure among all the outlets to retain your audiences so that you can easily strive for the profit of the business.
Ensure your Earning potentials: Since this is the first time you are going to launch your venture in a new territory, you can't rely on profit in your trial, you may have to invest more than the decided upfront costs. Have a comprehensive Financial Plan that helps you to meet the unexpected expenses.
Draft a clear Franchise Agreement: The FDD - Franchise Disclosure Document is the essential legal document that states the rights, power, and authorities of both the Franchisor and Franchisee explicitly. This document should certainly cover every interest of the Franchisor and the Franchisee. It should clearly state the tenure of the agreement, ownership rights, and responsibilities, percentage of royalties and fees, standard operation costs, training, and management support, and conditions for the termination of the franchise agreement.
It is mandatory to have a clear Franchise Agreement to avoid any legal dispute between you and your franchisee in the future. Also, it is even wiser when you have a professional attorney or lawyer for both sides while signing up for the agreement. So that they could clearly explain the terms and conditions and the percentage of the stake you will own.
Choose the Right locations: This is the place where most of the franchisors miscalculate. It is because in the quest to expand their operations they end up picking the wrong location. Often most of the franchisors have the conception of promoting the business through an advertisement for any location. But, over here you have to remember that you cover the maximum targeted audience when you pick a location. Though your location is not present in a highly remote area, do your consumers can afford to commute to that specific place only for your service. These are the vital perspectives you must look on before investing yourself in the franchise business.
Select a Right Franchisee: Choose the right Franchisee to represent your business. As a Franchisor, it is essential to understand that your relationship with the franchisee is not just the contractual obligations that you both have signed. It is a way more than that, a Franchisee eventually becomes an integral part of a business upon the Franchise Agreement. You must be very choosy while picking a Franchisee as he is one of the people who is going to be a supportive hand who gets you out through any odds.
Select a Franchisee who can come up with new ideas, on whom you can rely on and one who possesses the caliber of integrity and intelligence. It is better to enlist the skills and qualities you expect from a franchisee and stick on to that notes while choosing the Franchisee. Picking a wrong Franchisee not only causes irreparable damage to your business but also to your brand reputation.
Schedule and Conduct Regular Training program: To make your new Franchise venture successful one as a Franchisor you are held responsible for conducting regular training programs and look through the employee's concern in the newly formed team. It is preferable to have a manual of your operations and circulate it to the freshly recruited employees so that they can have a clear idea of your operations. Know that for a successful and profitable franchise it is necessary to impart the employees with the necessary training and skills. Apart from establishing a good rapport with your franchisee, it is also important to have an established support system with your newly recruited employees to ensure brand and service consistency.
Franchise Marketing: Last but not least in a Franchise business is marketing. Marketing occupies a vital role in the success of any business venture. Knowing how to market your business or services help you attract more new customers to the business. Over here you can even seek the advice of your franchisee so that you can have different perspectives. Also the franchisee is more vocal in that specific area than you. Chances are there where the franchisee can get in a good network of consumers to the business.
Though Franchising a business aids in better market penetration and faster expansion of the business it is important that you focus on all of the above-mentioned points before starting a Franchise business. Hopefully, this blog helps you out to know the essentials areas where you must focus primarily.