Key considerations when planning to franchise a business

Once they have established their company, most entrepreneurs are keen to continue growing their business as much as possible. Some business owners do this through creating a chain of company-owner stores, while many other have preferred to expand by franchising.

Once they have established their company, most entrepreneurs are keen to continue growing their business as much as possible. Some business owners do this through creating a chain of company-owner stores, while many other have preferred to expand by franchising.

If you are new to franchising your first thought will probably be how do I franchise my business? However, to build a successful network of franchise owners it is first essential that you fully understand what franchising is and what your role, as a franchisor, will involve. Once you are certain about this and that you can fulfil your obligations as a franchisor you can then start looking at franchising your business.

What is franchising?

Franchising is definitely not a cheap and quick method of expanding your business. Instead to establish a successful franchise network takes time, money and determination.

At its very basic level, franchising can be described as a ‘business marriage’ between an existing business (the franchisor) and the newcomer to the business ownership (the franchise owner).

There are different types of franchises from management franchises to hands-on franchises, as well as covering many sectors including retail, food and drink, fitness, and sales. Whatever type of business you own there will be a franchise category in which it fits.

The franchisor’s role

As a franchisor your main role will be to create a viable and attractive franchise opportunity and, once you start recruiting franchise owners, providing comprehensive training and support.

Your franchise owners will be expecting you to provide them with all the tools they need to own and operate a successful business. You in turn will expect them to follow your business model and put in the hard work needed to own a strong performing business.

As a franchisor you will be responsible for promoting your franchise opportunity and recruiting franchise owners who have the suitable skills, experience and disposition to fit in with your brand and network.

Advice and guidance from the experts

If setting up a franchise network seems daunting, you can get expert advice and guidance by speaking to franchise consultants.

A good franchise consultant will be able to help you with all areas of establishing a successful franchise network, from whether or not your business model is suitable for franchising to assisting you with the recruitment of franchise owners.

It would be advisable to partner with a franchise consultant experienced in this sector, as they will have the knowledge gained from years of helping business owners to franchise their businesses. As well as this they will be able to help you establish contacts within the industry that will become essential as your franchise becomes more established, including introducing you to a good franchise lawyer, who will be vital in helping you to draw up a Franchise Agreement.

Once you are ready to start recruiting franchise owners, your franchise consultant should be able to guide you to which industry publications and websites you should advertise in and whether or not to target the local or national press.

Creating a strong franchise network

Your job as a franchisor does not end with the recruitment of franchise owners. In fact, this is where you main role begins – training, support and guiding your new franchise owners in establishing successful businesses. Initial training and support is not enough, you should be prepared to provide constant, ongoing support to all your franchise owners, as well as supporting their local marketing strategies with a head office lead marketing campaign.

Keep in mind that while doing this, you will also need to continue operating your company-owned store or stores, so that your income does not solely come from your franchise network. Most of the money you get through your franchise owners should be poured back into the franchise so that your franchise owners can see that they are benefiting from being part of your franchise network.