As a consultancy, we often come across businesses that are just on the cusp of being ready to franchise but need a little bit more work. So what are the core principles that a typical business should be looking out for to make them ready for the franchise journey? This can be essentially broken down into 6 key areas:
Established business – it’s important as a potential franchisor, that you have a business that’s established. A brand-new business (or one that is still in the startup phase) will often struggle to get the credibility it needs to successfully recruit franchisees.
Profitable – being profitable means that when you speak to prospective franchisees, you can point to your success and help them visualise their business journey. Profit is a huge motivating factor when franchisees look at the options available to them as an investors.
Defined products or services – are you clear about what you’re exactly selling? Franchisors need to be crystal clear on their core service or product range. This should include secure supplies of stock (if the business is product-based) and a well-developed pricing strategy. A clearly defined offering allows you to build up expertise as a franchisor, something you can share with future franchisees.
Clear operating procedures – one of the hallmarks of a successful business is always the clear operating procedures that staff and customers can follow. Clear operating procedures can be documented more easily, which means developing an operations manual is not an arduous task.
Established CRM system – more and more businesses rely on a CRM system to manage data and to use it to remarket products and services. Having a dedicated CRM system is crucial to any successful business, and franchisors need to provide franchisees with a suitable method of capturing and managing customer data. Don’t forget your legal responsibilities to manage data correctly!
Defined local marketing strategies – do you know how to generate new business from scratch? Many well-established businesses don’t need to think about such issues, but if you’re a franchisee and developing your business from new, it’s a crucial question that needs to be answered. Franchisees always look to franchisors for advice and guidance on local business marketing, and it is well worth potential franchisors paying attention to this issue early on.
Of course, the only real way to know if you are ready to franchise is to speak to the experts. So feel free to contact The Franchise Company for advice and guidance on how you should start your journey to becoming a successful franchisor.
