Part One – The Fundamentals of Franchising

We’re delighted to have Julie Taylor from Runo joining us over the next 10 months, who will be sharing an article each month about franchising your business. This month, the Fundamentals of Franchising.

  • Day 1 – Fundamentals of Franchising
  • Day 2 – Making the Finances Work
  • Day 3 – Understanding Your Operations Manual
  • Day 4 – Your Business Processes
  • Day 5 – Training & Development
  • Day 6 – Franchise Agreement & Compliance
  • Day 7 – Building Your Operations Manual
  • Day 8 – Marketing & Public Relations
  • Day 9 – The Franchise Sales Process
  • Day 10 – Going to Market

Creating a franchise model from an existing business is very simple but definitely not easy. The costs alone can be really daunting but strategic planning leads to great success. However, franchising is not just about your business – do you have what it takes to become a franchisor?

Over the next 10 months, i’ll be walking you through the 10 steps of franchising your business. In this issue, i’ll be discussing the Fundamentals of Franchising.  Read on to learn more about

  • Your vision & Mission
  • Planning for the future
  • Your pilot operation
  • Working out territories
  • You as a leader
  • Time management
  • Protecting your brand

If you have any questions about the topics covered in this issue, please do not hesitate to get in touch.

Franchising a business can seem like a really easy solution to business expansion, and it is easy if you follow the correct processes.  Business format franchising, which is what most franchises in the UK are, is all about processes. Get those processes right and you will have a successful franchise group.

In truth it’s simple to do but it’s not always that easy. There are a number of things you need to understand if you want to make a success of your franchise group. Getting each one of the steps right is the hard part. Let’s take those steps one at a time over the next few months:

Understand the terminology:

  • A franchisor is the owner of the brand
  • A master franchisee will have the rights to develop the brand in a particular area or country
  • A franchisee has the rights to use the brand to replicate the pilot operation in a given area
  • The pilot operation is the business(s) used to create, test and refine the processes in the business
  • Territories are the areas given to franchisees as part of their contract with you

In very simple terms, as a franchisor you are helping someone else to create a business like yours.

Your franchisees will most likely have the rights to a particular territory. This territory, restriction is usually for marketing purposes but can be more restrictive for some franchise models. When creating your pilot it’s important to test it on an area similar to the territory size you will allow franchisees to use.  You must ensure that you can prove that the business works, and that it is profitable. This to begin with will be your “Prove It”You will need to create a team of people who will work with you and your franchisees to develop the brand. Think about it, do you know everything about running a business? Do you for example know:

  • exactly what the health and safety laws are?
  • the legalities around forming a business.
  • the employment law inside out?
  • Everything about marketing, including how to use social media for business?
  • The list goes on.

It’s really important that you don’t try to be the font of all knowledge. That’s where mistakes happen, and they can be really costly. Surround yourself with people who are experts in their field.

The pitfalls

The trick to this is to be prepared. You will need to ensure you have enough money to get this off the ground and be able to market it effectively. To be a successful franchisor you need to become a recruitment and training company. Recruiting and training franchisees who will be great advocates of you and your business.

Apart from being underfunded, one of the biggest mistakes franchisors make in the early days, is to give huge territories that can’t possibly be run from one outlet, without a clear plan to develop the area.

This can have a detrimental effect on your business. You are limiting the number of outlets you need, to create a truly national franchised offering, and thus limiting your growth and income potential.

It’s important that you have a clear vision for the business and that your franchisees understand that vision. You, just like your franchisees should have a clear plan for the future.

That’s all for now folks – next month we will explore the financial aspects of becoming a Franchisor in the next monthly franchising magazine.

Runo Franchise Training

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