Over the last 20 – 25 years franchises has become a popular way for business to expand their market share.
They have become popular as a business model as they have proven to be lower risk with higher success rates than conventional start-ups - franchises are normally based on an already proven and profitable business model. Research has shown that 80% of companies that start on the conventional route have failed within the first two years whereas, in the same period, 80% of franchises are still operating.
There are eight key phases in developing a franchise:
The Franchise Opportunity: a summary detailing the key elements of the franchise. How long the franchisor has been in operation, what the market potential is for the product or service, what the franchise will get for their investment, operational area, initial and ongoing fees and costs and what the franchisor will offer by way of ongoing support.
The Operations Manual: the most important item as it details exactly how the franchisor will expect the franchisee to carry out business on a daily basis.
Contracts: the detailed legal basis for the ongoing business relationship between franchisor and franchisee.
Franchise package: a detailed sale document which outlines the precise terms and conditions of the franchise.
Franchisee recruitment: the recruitment process for attracting new franchisees to the opportunity.
Franchisee training: planning and implementing both the initial training programme so that new franchisees understand how the proven business model works and their part in making a success of the venture together with further regular training to build on the initial programme.
Launch: the first few franchisees will become the base model for future franchisees. Making sure that they are successful will lead the way for the future success of other franchises.
Growth plan: determining how many additional franchises are possible and how they will be integrated into the existing network.
Whilst each franchised business is different, the basic building blocks for success are a common process whether the franchise model already exists or whether you are only beginning down the road of franchising.
If you are consider that a franchising model might be right for your business, it helps to have an experienced Signa advisor who understands the detailed way a franchising model works.
If you would like more information on how Signa can help please call us on 01494 562738 or send us a message.