Here are 6 tips for success
Franchising is a method of raising capital and employing dedicated, passionate and motivated management (franchisees) to grow a business concept quickly and effectively.
Figures for 2020 show that there are currently around 48,000 franchises in the UK. Of those, they are said to contribute approximately £15 billion to the UK economy.
If you have a successful business and you are contemplating expanding and wondering how you are going to achieve such expansion, one option to consider is to create a franchise of your business.
Franchising is a very popular way to expand your business, with there being many examples both nationally and internationally of well-known brands that started their growth this way.
If you are considering franchising your business, here are our 5 top tips of aspects you should consider:
1. Concept
Is your business capable of being franchised? This will come down to a variety of factors, including the nature of the business, the area in which it operates, and whether your business will be seen as being attractive to third parties who would be interested in taking a franchise and what competition might be faced.
2. Franchise Agreement and Operation Manuals
This is key and will form the very foundation of how the franchise operates. You will need to carefully consider how you want to operate the franchise and what rights you are prepared to give to the franchisee. For the franchisees, the operation manual will enable them to replicate your system and processes. For you as the franchisor, it enables you to ensure quality standards are adhered to, and for you to monitor the progress of the franchisees.
3. Recruitment
A good relationship between a franchisor and franchisee is key to building a successful franchise. That’s why getting the recruitment process right is critical for both parties. Do your due diligence. The franchisee you select will be representing your business and your brand. They will need to be committed to the business concept, driven and willing to make the franchise business a success. So, select your franchisees wisely. Take your time and take professional advice.
4. Training and Support
Once you have your systems in place and the franchisee in place, you will need to ensure they are correctly trained in your business. This training will also be ongoing, with many franchisors holding regular meetings and/or seminars to ensure knowledge is maintained and kept up to date on how the business is to be run and the brand is presented.
5. Brand Protection
A strong business brings with it a brand that becomes known in the market place. With that, brings risks. The risk that attempts may be taken to impersonate or use your brand and the know-how behind it, so ensure trademarks and legal protections of, for example, intellectual property are in place. Breach of confidentialities, so put your sensitive online operational guidance behind password protection. Social media hacking, which can seriously damage a business’s brand, so ensure all logins are secure and act quickly where a breach is suspected.
6. Seek Professional Guidance
Appoint a franchising lawyer to help with the operational and legal steps required to grow your franchise. They will advise you throughout, compiling a sound Franchise Disclosure Document, with information about you, the franchisor, and your business, the franchise system, and the agreements they will need to sign so that they can make an informed decision. Plus, they will guide you in making the right critical decisions, and protect you and your business now for the future.
If you are considering becoming a franchisor, Rooks Riders Solicitors’ specialist Franchising Team are on hand to guide you through your journey, advising you every step of the way.
