A franchise business is one in which the owner or the franchisor allows a third party or third parties (franchisees) to run a business with their brand name. It is most definitely a lucrative way
A franchise business is one in which the owner or the franchisor allows a third party or third parties (franchisees) to run a business with their brand name. It is most definitely a lucrative way of expanding their business.
Most of the big brands that we see everywhere such as McDonald’s, KFC, Subway etc. are all franchise businesses. According to various reports, McDonald’s, founded in 1954 is the biggest franchise business in the world with over 33,000 outlets.
While these are all big and hugely popular brands with major investments, it is actually possible to develop a small business into a franchise as well. Let us see what steps you need to follow to turn that dream of yours into reality!
1.Know every aspect of your business
Before turning your business into a franchise, it is extremely important to know and understand every single aspect of it. There are many business owners who start their businesses and then leave all the hard work to be done by their subordinates. However, if you want your franchise business to be successful, this will certainly not work. You need to give each and every detail about the way your business runs to the franchisees.
You are their mentor in this whole process and the better you guide them, the more are the chances of your franchise being a resounding success!
2.Fix a budget
There are many people who don’t start franchise businesses, even though they want to, as they feel that it is beyond what they can manage financially. However, that is not always the case. A franchise business might not always cost you that much, if you plan it properly. You need to prepare a budget and have to act accordingly. After all, there is no point of wasting money more than you can afford.
Talk to the most experienced franchise attorneys and consultants who would give you the best advice. With their help, you will be able to set up your franchise with the hope of optimum profit and minimum investment.
3.Be good at organising everything
Along with understanding every little aspect of your business, you also need to get everything organised. From developing new marketing strategies to getting your staff trained, you have to be pro-active all the time. Making an operational manual for the franchisees might be a good idea as that will help them to refer to the business policies whenever they need. Also, make a rule of getting all the important papers and decisions approved by you before they are executed.
4.Choose your franchisees wisely
As you would be about to start a franchise business, you would find a lot of people interested in becoming your franchisees. However, don’t just select anyone and everyone because they have the money. That would be the biggest mistake you can make, as most of the people who show a lot of enthusiasm in the beginning, give up quickly. Take their interviews and see it for yourself if they have got it in them to go all the way.
Always be careful in choosing your franchisees as the success of your franchise will largely depend on them.
5.Too much of freedom to the franchisees is bad
Although you would be training your franchisees to the best of your ability and would also be giving them the operational manual, you can’t leave everything to them and expect them to be perfect. No matter how hardworking and diligent a franchisee is, at the end of the day, it is your business and you need to be aware of every single detail.
Your brand is of supreme importance and you should work consistently towards protecting it and growing it as well. Letting others represent you and your brand could be tricky. You certainly have to give them quite a lot of freedom, but mind you, not too much of it! Go through their activities regularly and make sure that you are given timely reports as well. Always remember that you are the boss and keep the charge in your hand.
6.Be supportive with your franchisees
The success of a franchise business depends on the success of the franchisees. Hence, as a franchisor, you would need to give them the support they need. Talk to them, listen to their queries and try to find solutions together. If it’s not possible for you to go and meet them all the time, make it a point to stay in touch through phone and mails. Celebrate their small achievements. It will give them the much needed encouragement to do even better.
7.Find suitable locations
Finding suitable locations for your franchisee business gets half the job done. Choose locations on the basis of the nature of your business, the locations that you know and you feel would make your business flourish. You might want to start by choosing locations close to your home, which would make it convenient for you to manage them. Also, you shall be able to visit these places more frequently. However, keep them at a considerable distance from each other so that one doesn’t hurt the business of the other.
8.Make proper strategies
No business or in this case, no franchise business can work without making proper strategies. You need to read a lot and keep yourself updated about the latest changes and developments. Right strategies at the right time can make all the difference. You should be alert all the time. Set small targets for yourself and your business.
If possible, find someone with whom you can discuss all your strategies and plans. A business is only as good as the business owner. Hence, it is up to you as a franchisor to decide the future of your business. If you work with proper planning and a set goal, no one can stop you from reaching the zenith of success.