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Benefits from franchising my business
There are a number of great reasons why you might want to consider Franchising your business:
Achieve Faster Growth at Lower Cost
It is the franchisee that is funding the new location with their own resources. This enables you to grow your brand presence and footprint much more quickly, opening multiple units in rapid succession.
The franchisee will take responsibility for premises costs (you may well be involved throughout the process), costs of acquisition, fitting out and equipment.
“Staff recruitment, cost and management is the franchisees responsibility.”
More Committed and Motivated Partners
A franchisee owns the business and its success will be directly linked to their input and effort. This can lead to far more motivated individuals than in an employee model.


Local Knowledge
A franchisee will probably have good knowledge of their territory and demographics and have established connections that can enable them to develop business more swiftly.
Simplified Management Structure
Business owners not employees. Whilst the Franchisor still needs to set overall strategy, visions and values and demonstrate leadership it is the Franchisee that will manage the day to day business operations, staff etc.
With multiple unit franchisees there is potential to grow an even bigger footprint with fewer franchisees. Often more beneficial to have 10 franchisees with 5 units each than 50 franchisees.
More Management Longevity
An outlet manager in an employed model might leave and need to be replaced regularly causing disruption. A franchisee is making a longer term commitment and much less likely to create churn.
Other Cost Benefits
Achieving bigger scale brings greater buying power and economies of scale.
This can be true of product supply, services supplied to your network, lower delivery charges etc.
One key aspect to this is marketing power. Imagine as a one or two store Fast food restaurant wanting to advertise on prime time TV, great audience reach but hugely expensive.
A bit different with perhaps 20 franchisees all contributing and benefiting from the reach at 1/20th of the cost!

Knowledge Gain
The Franchisor has proven the business model and made a success of the core but often the operation is relatively small and reliant on a small group of people.
New franchisees joining the network can bring a wealth of experience and skills often outside of the core business operations which, when harnessed, can prove truly valuable.
Value Add and Profit
“Did we leave this until last – Oops! This is often the main reason a business looks at franchising but all of the above benefits really matter.”
They all lead to the potential to significantly enhance the value of the Franchisor business and increase profits.
Not necessarily revenue as the Franchisor will earn from a percentage of new revenue and sales rather than the full amount – but on a much more cost effective and therefore more profitable basis.
The Basic Structure
Sets out a fee structure, usually comprising an upfront licence fee, ongoing Management Service fees/Royalties and often a marketing levy to cover the costs of centralised marketing support.
In some cases there may also be additional charges e.g. software licence fees and also where product supply is relevant, a margin might be charged on products.
The model is captured in marketing materials, detailed information memorandums and an operations manual- all then brought together in a legal contract (Franchise agreement) which is the binding contract between Franchisor and Franchisee.
“The franchisor creates a ‘franchise model’ with all the component parts of enabling the business to be replicated.“
All sounding good so far?
Just a few more things to think about.
We have a real passion for Franchising and always looking out for businesses that seek scale and we are constantly thinking about how we can create a Franchise business from something already proven end established.
Most of the time it is entirely workable but sometimes it just isn’t and in some cases it is just not the right model or it simply does not fit for the business owners.

Is it possible to replicate
The business owner has built their business primarily on the personality/individual skill and this is too difficult to replicate e.g. a landscape/portrait artist.
They can never achieve true replication.
Brand Reputation
“A big plus for a Franchisee is to start a business with a tested known brand.”
A disadvantage for the Franchisor is that they are handing over, under Licence, that brand and reputation to someone else to use.
This is mitigated via processes and controls and obligations within the Franchise agreement but nevertheless carries a risk.
Did We Choose Well Enough?
We talked earlier about Franchising driving more motivation and commitment than perhaps an employee might bring.
However, subject to Employment Law practices, you can fire a employee.
Harder to exit a Franchisee, although again you will have certain rights within the Franchise agreement.
Another factor is the different approach a Franchisor must take in leading and supporting Franchisees verses a perhaps more directive management style in an employed structure.
It does not suit everybody.

Failure to Achieve Scale
In essence it didn’t work, you recruited badly and they failed or you didn’t recruit at all and did not achieve growth and never saw a return on your investment.
This can happen – important you get good guidance and advice and set sensible expectations at the outset.
“If a new client asks me how many they should plan to recruit in the first year, I say it’s impossible to tell, recruitment is the hard yards.”
One, perhaps two, is realistic usually, more than that I suggest you have done well. For me quality over quantity is best.
Resources/Cost
There is a need to have available resources to commit to the Franchise project.
Whilst outsourcing much of the development of the Franchise concept is advisable the business will still need to devote time to this aspect.
Systems and processes will be established but they may need to be scaled, adapted etc. e.g. CRM systems/Websites – there will be a resource cost in time and cash.
Development budgets will vary from business to business and will need to include potentially a feasibility stage, a development stage, a launch and marketing stage, recruitment, onboarding and training and then ongoing support and management.



“I have always had a passion for franchising as a model to achieve scale in my business. It works!”
Andrew Alleway – MD Tidy Green Clean

Contact us and let’s see how we can work together.
Can I Franchise my business?
Let’s assume you are comfortable that the advantages out-weigh the disadvantages and it feels like a good option for you to achieve scale. Then the answer is probably “maybe”.
We would always recommend a feasibility study to enable you to make that decision on an informed basis but as a guide here are a few more questions to consider:
Is the business successful?
“Franchising is not a recovery play – you have to be able to build upon a solid foundation – it is about replicating success.”
Does the business work with defined systems and processes?
This can be to varying degrees and might not be all written down but the business should be able to identify methods of operation that work and can be replicated and scaled.
Always include the processes that generate new business and retain business – not just purely operational.
Can I replicate?
This is not just copying but actually re-creating the business in different locations and operated by new people to the business.
Include in here the ability to train and educate somebody else to do what you do and do it well.


Can I create an environment of mutual trust and support?
Franchisees are not employees they are business owners and have an independent business that they have a right to sell and make decisions about.
They will operate best in an environment of mutual respect, trust and support.
Can the business sustain a profitable network?
Critical to Franchisor and Franchisee is the ability of the business to sustain an investment return for all parties based on reality and not expectation and hope.
You might expect a Franchisee, benefiting from everything you have provided to them and your experience, brand awareness etc to grow quicker than you did at the start – that’s reasonable.
However, you need to be able to evidence that where the franchisee invests appropriate effort as well as cash that there is enough margin in the business to generate a return as well as the Franchisor’s share of the success.
“Overall, back to the initial answer – ‘probably maybe’ you can franchise your business.
Let us help you answer that question with an initial discussion.”
Where do I start?
Whilst not essential we would recommend a feasibility study as the first step which then becomes your franchise development plan.
This Should Cover
- An assessment of the business and its current position as a foundation for establishing a franchise model.
- This will include Trademark protection aspects. Is the business “fit to franchise”
- Key markets both for customers and franchise development including assessment of positioning with competitors
- Unique selling points and added value attraction as a franchise model
- Values and Visions of the business
- Management structure and capacity and future requirements
- Detailed assessment of financial information to assess the pricing and revenue returns for a franchisee


- Review of potential market opportunity to grow the franchise
- Review of systems and processes and likely requirements as a franchise model
- Where is the value add in the package for a franchisee to ensure value in their investment and return on that investment
“Overview of what the franchise model might look like to include pricing and package content”
- Territory definition and franchisee typical profile
- Recruitment strategy
- Franchise development budget and likely return on that investment
- Detailed financial forecasts for both franchisee and franchisor.


“Chris provides appropriate guidance, suggestions and advice and has removed the initial pain felt in the recruitment process by bringing vetted franchise prospects to the table”
Andrew Alleway – MD Tidy Green Clean

Let’s see how we can work together.
The feasibility is positive what’s next?
The next steps we undertake in the process are as follows.
Documentation
From the feasibility study, or if we skipped that step, from scratch we need to build the model and documentation:
Franchise Prospectus – The marketing piece designed to provide potential franchisee’s with sufficient information to continue their interest
Advertising Copy – Necessary to attract interest in the first place
Information Detail – Much more detailed information on the mechanics of the business, pricing and possible revenue returns for a franchisee to include more detailed costings on a typical franchisee business.
We don’t give this out to every enquiry as the information is more commercially sensitive than the prospectus. This is used post a proper conversation with the prospect to ensure a genuine interest
Franchise Legal Agreement – The really important legal contract between Franchisor and Franchisee capturing all the obligations, restrictions and agreed terms.
The involvement of a lawyer experienced in franchising is really important. Add in a deposit agreement and potentially a Non-Disclosure agreement
Operations Manual – Basically captures all of the operational processes, Sales and Marketing, business set up, operation and exit
This will also cover ongoing communications and flow of information required to track performance and monitor compliance. Usually a substantial document and the one that takes the largest chunk of time

Launch
Once we have completed the above, we start to advertise for franchisees.
It is likely we will use a number of methods from website aggregators, exhibitions, industry specific mediums and social media to raise brand awareness and active advertising.
Recruitment
Attracting lead enquiries is not actually the difficult part. The hard yards are in sifting enquiries, validating those of genuine interest and actually getting hold of them to have a conversation.
Once communication is established then typically a number of interactions will follow with significant sharing of information until the prospect either decides against an investment ( the majority) or opts to join the happy franchise team.
This process is even harder for new franchises.
“A word of caution, this is not like selling a commodity or even a business that when sold you have little involvment.”
This is selling the opportunity to join in a long term business relationship and effectively partnership – the decision must include the likelihood that both parties can work alongside each other in this way.
Divorce is usually painful!


Onboarding and Business Plan
Once a good quality candidate is found and they have completed due diligence etc then you can conclude the signing of the Franchise agreement and all systems go.
Except, whilst the capital may sometimes be readily available from a prospect franchisee, more often than not, they will need to seek funding support.
Whether they need to borrow funds or not you will need to work with them in creation of a business plan, whilst a good franchisor will provide information and support this process, the franchisee must own the plan and be prepared to commit to it.
The Business Plan Should Serve Several Purposes
1
It should demonstrate that the Franchisee has grasped the business, understands their market and knows what is required
2
It should demonstrate the viability of the business to the franchisee and any lender
3
It should be used to support ongoing discussions on business progress and performance
Launch of Territory/Location and Training
This is where the fun should really start.
Your brand new shiny Franchisee will need thorough training and more support in the early weeks and months than you could possibly have imagined.
You should have a structured training programme supported by the Operations manual
You should have a structured ongoing support programme which includes on site support and regular communication and effective reviews.
It is likely you will have a formula for the launch to help your franchisee launch their business and really get started.


“Remember – you will only be a successful Franchisor if your network is successful.”
Chris Coltham – CC Franchise Solutions