Franchising is a proven business model for expansion when done well. However, when executed poorly, the results can be costly.
A few real examples:
Each of these scenarios could have been avoided with the assistance of a strong, experienced franchise support team. Starting and operating a franchise involves a lot of details. The business skills and experience gained by running a successful retail or service business are different from those needed to properly develop a franchise system. You will need legal agreements, trademark registrations, marketing brochures, financial models, control monitoring systems, website development and more. All of these should be based around a sound business strategy. When done properly, a strong, well thought out franchise system will save you money and headaches down the road.
A strong support team will allow you to capitalize on the franchise experience of others and avoid costly mistakes of trial and error. A team of qualified franchise advisors can play a critical role in your franchise development while adding credibility to your franchise brand. Your team can include an accountant, lawyer, consultant, real estate experts, website developers, marketing experts, and others – all of whom should have franchising experience and expertise. You may work with several individual firms or one firm that can offer the complete set of required skills and experience. Each member of your support team makes a different, but significant, contribution. All should work together in alignment with a common strategy and goal.
A franchise consultant will often be a part of your support team. A franchise consultant will work with you in developing the business and strategic aspects of your franchise model. Areas in which the franchise consultant can assist include:
Says Gigi Harding, CEO of Kwik Kopy Printing Canada, “The franchise consultant can also play a role in assisting the Franchisor to determine their own staffing structure as they grow.”
Greg Lawrie, President of Pro Fleet Care adds, “A franchise consultant should be the first person you put on your team. They will save you a lot of time and money as they will help guide you around the many pitfalls of franchising. Their knowledge and guidance will help you determine what your true needs are from the other support services consultants you will have on your team.”
Once your business strategy is clearly defined, a lawyer can develop the legal requirements. As laws are constantly changing, a lawyer specializing in franchising can guide you through the legal aspect of franchise development. Areas in which a lawyer can assist include:
An accountant will often be a part of your franchise support team. A good accountant with franchising experience can assist you in the following areas:
In addition to the consultant, lawyer and accountant, you may also work with real estate experts to find great locations; an advertising firm to assist with the development of the branding materials and brochures; a public relations firm to help generate public and media awareness for the brand; a banker to assist both the franchisor and prospective franchisees with financing and a website development firm to create web pages that will provide information to customers, prospective franchisees and existing franchisees.
Greg Lawrie says, “I have learned the hard way that good franchise support team is worth their weight in gold. But you do need to do your homework.”
Each member of your support team brings specific experience and expertise to support the overall franchise growth strategy. When selecting members of your support team, ensure they have the experience you are looking for. Questions to ask include:
Ask the potential support team member for references and confirm that they have delivered what they promised to their other clients. Be wary of companies that use a package or “one-size-fits-all” approach. It may appear that you are saving money and getting things done quickly but it is often at the expense of long-term viability. Franchising requires clear strategy, careful development and great execution. Even small mistakes can end up being costly. Shortcuts, like using a template document or copying your competition, do not take into account the specifics of your circumstances and your business model. If you cannot afford the professional fees required, consider if you are really ready to franchise. In order to franchise your business properly, it may mean seeking outside funding or putting your growth plans on hold for awhile.
Once your franchise is more established, you can still benefit from a strong support team. Bringing in outside professionals can often challenge the status quo and push conventional thinking within the organization. Outside resources can often encourage companies to move beyond their comfort zones and can assist them in enacting positive change. Even mature franchisors must be continually and strategically evaluating and evolving their brand due to changes in competition or consumer needs and tastes, for example.
Outsourcing allows you to draw upon well qualified resources in a typically more cost effective way than hiring the same experienced professionals as full-time employees. Franchising is complex and requires attention to detail; a strong team of franchise experts and advisors can help you avoid costly mistakes and grow your business using a structured approach aligned with a sound strategy. This will result in the creation of a solid brand and franchise system that can offer long-term viability to the franchisor and franchisees.
For more helpful tips and valuable guidance on franchising, check out Wayne’s book Franchising Demystified.