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Benefits of Franchising Your Business

Benefits of Franchising Your Business

As an entrepreneur continues to grow their business, managing all aspects of the day to day business effectively quickly becomes a challenge.  Multiple locations of any enterprise involves many moving parts, all of which need to be monitored and maintained in order to sufficiently and successfully exercise a typical day of business.  Elements such as staffing, customer service, sales and brand continuity all become more and more difficult as   Growth can lead to unsustainability if not acted on properly.  Business owners frequently wish for expansion, but fear their ability to control each operational process will become muddled or lost altogether.  And, in most cases, they are probably right.  Many times, business owners who grow through company-owned and managed locations run into obstacles that hinder growth as the business expands beyond what they can manage directly.   

 

It is at this crossroad in a business’ growth that franchising becomes a viable expansion option.  Franchising your business allows you to multiply a brand’s footprint, but with added manpower and capital to scale the growth.  The value of having independent business owners who have money invested and their direct, onsite focus is enormous and the performance of franchise-owned and operated businesses almost always outperforms company-owned locations of the same business model.  Franchising your business can also reflect positively to the business’ image, as the public sees this new business as locally owned and operated and if the franchise owner is the right person they are connected to the community and know how to connect to consumers in the area. 

 

People are naturally attracted to familiarity, and a process that is consistent regardless of the location in which it is being executed will lead to successful results.  Franchising allows a brand to grow and duplicate at several levels.  At the national or global level, all franchisees and corporate units contribute to a marketing fund that is used to promote the brand and build awareness for the company.  At the regional level, franchisees work together through regional cooperatives where advertising dollars are spent in a region to build local awareness and leverage economies of scale in advertising and promotion spend.  At the local level, franchisees are required to spend dollars in promoting and advertising the business in their immediate market.  The combination of the advertising platforms maximizes the opportunity for brand development and makes franchising a win-win relationship between franchisor and franchisee.  

               

Franchising your business allows entrepreneurs to attract other like-minded people with a thirst for owning their own business, but with the desire to have guidance and support along the way.  Many do not want to endure the time, effort and risks inherent in starting a business from the ground up.  By purchasing and joining a franchise, franchisees are able to reduce the stress and increase the chances of success.  Franchising your business will naturally pool resources together – collaboration amongst franchisees leads to sharing of ideas and proper quality checking of each system and process.  A business owner benefits in having easy access to criticism in an appropriate and relevant manner.

               

The benefits of franchising your business can be extensive, but when it comes down to it, the key benefit is a transition from operational focus to strategic.  The entrepreneur who is able to make this transition stops focusing on the small items inherent in managing a business and begins to focus on what strategic aspects will help drive the growth of the brand and scale the business.  The funny thing about this transition is that people who are stuck in an operational mindset many times are busier and work harder than those who are strategic-minded.  Franchising is a big picture initiative where the product becomes the business model itself and with each transaction, the brand grows exponentially. 

 

For more information on the benefits of Franchising Your Business, Contact us:

info@FranchiseMarketingSystems.com

When Are You Ready to Franchise Your Business?

When Are You Ready to Franchise Your Business?

You have a business and want to expand.  There are a variety of ways to expand the number of locations, company owned, bringing on partners, venture capital or franchising. Many businesses decide that franchising could be an extremely effective way to develop a brand and business model without the intensive capital or staffing needs of other channels. But how do you know your business is ready to franchise and how do you know when is the right time to franchise your business? Here are some items to think about if you’re seriously considering whether to franchise your business.

 

1- Is your business currently successful and how do you define that success? If you want to entice entrepreneurs to invest in your brand, it must have a track record of solid revenue growth, dependable profit margins, and a strong customer/client base. Your business may be ready to franchise if the business has credibility based on current success.

 

2- Why is your business successful? Can that success be achieved in other locations in volume? The success must be due to factors that can be replicated and easily taught to others. For example, if your successful concept is based on a service that’s in high demand and isn’t widely available, your business may be ready to franchise if prospective owners can learn how to run your business model. But if the reason your business is successful is due to being located in one hot market or to having unique skills that make you best suited for success, you may not be able to replicate that success.

 

3- Can you afford to franchise? You may be ready to franchise your business if you have the capital to put the necessary franchise infrastructure in place. You’ll need to hire attorneys to provide legal support and all the necessary documentation. You’ll need to set up training, operations, and marketing systems. You’ll need to cover the cost of state registration fees. You may hire franchise consultants. The cost to franchise can range from $15,000 to $100,00 depending on the business.

 

4- Can you sell your franchise business concept to entrepreneurs? How will you convince anyone to spend the money necessary to open a location for your brand? You’ll need to market your business to prospective owners and sell them on your concept. You may be ready to franchise if you can make the argument that between the franchise systems you’ve put into place and the prospect for customer/client demand and revenue, that your business will be a success for anyone willing to take a risk.

 

5- Are you ready to provide the systems to franchise owners for long-term success? If you’re ready to franchise your business, your franchise plan must include systems for training, operations, administration, and marketing. If your business requires equipment, you need to find ways to minimize those hard costs for owners. You may need to offer assistance with lease agreements or attaining the most desired locations. Your business needs to be turnkey for every franchise owner. You may be ready to franchise your business if you have a solid plan for franchise owner support.

 

For more information on when you should franchise your business, contact us for a free franchise consultation:

https://www.franchisemarketingsystems.com/contact_franchise_consultants/

Franchise My Business with the Right Sales Process

Step 1: Franchise Outreach/Lead Generation

Franchise lead generation and marketing will fill your franchise sales funnel and be the first interaction with a potential franchise buyer.  Potential lead portals for franchise lead generation:

·         www.FranchiseConduit.com

·         www.Franchiseopportunities.com

·         www.Franchisegator.com

·         www.TheFranchiseCourier.com

·         www.FranchiseDirect.com

 

Organic leads can be generated through franchise referral programs, Franchise SEO, Franchise Public Relations and other mediums. 

Franchise Tradeshows can be an effective way to generate leads and meet potential franchise candidates in addition to other marketing channels.

Step 2:  Franchise Contact and First Presentation

Franchise leads should be greeted with an automated response promoting the model, the franchise value proposition and the overall concept so they are enticed to have additional discussions with the franchise team.  Franchise sales calls should be made within 60 minutes of the lead being submitted for best results.  We typically recommend that a text message should be sent as well. We then have additional introduction emails which should be crafted to your brand and franchise model, but ask key questions:

·         Why are you interested in the franchise?

·         What Time Frame would you like to open the Franchise?

·         Qualify the Franchise Candidate.

·         Present the next step in the sales process.

Step 3:  Franchise Presentation Call

During this call, you should explain the sales process and the defined steps in the process before they would execute a franchise agreement.

1.       Introduction and explain the team behind the franchise.

2.       Define the process and qualifications needed to be awarded a franchise.

3.       Ask the buyer to speak openly with you and share their story. 

4.       What is the timeframe for this decision?

5.       Confirm that the franchise process is clear and understood. 

Step 4:  Franchise Buyer Approval / Disclosure

Once the candidate has submitted their completed Franchise Request For Consideration form, it is reviewed and approval is granted to move forward in the process.  We review with candidate what to expect upon receiving the Franchise Disclosure Document.  We recommend sending a hard copy of the FDD sent via FedEx and electronically via DocuSign.  We then like to schedule a call to review the FDD with the candidate and go through the document in detail. Following the candidate being disclosed, validation and communication with existing franchisees is encouraged and recommended.

 

            Disclosure:  Current registered FDD document is sent to candidate.  Unaudited financial statements must be current within 90 days.  In registration states, the revised agreement must be renewed with every registration state every year.  The following are registration states: CA, FL, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, TX, VI, WA, WI. (https://www.franchisemarketingsystems.com/blog/franchise-state-registrations/)

Step 5:  Franchise Discovery Day

Once a candidate has been disclosed and had the opportunity to thoroughly review the Franchise Disclosure Document, an invitation to attend a Discovery Day is extended.  The Discovery Day is the ultimate franchise sales opportunity, it is where you show off the business, let them see the business in action and get to know everyone involved in the business model.  If the discussions take you there, you can ask for the close at the Discovery Day. 

Step 6:  Follow up for the Close

Constant follow up is given throughout the entire process, the closing process is no different.  Following Discovery Day, most often the candidate has additional questions regarding the information they were provided during their visit.  The final commitment to move forward and become a franchisee is requested and confirmed.

Step 7:  Award Franchise

Now that the decision has been made to become a franchisee, Franchise Agreements and all supporting documents are signed, notarized and submitted to the corporate office along with payment of the initial franchise fee. Training is scheduled and the countdown to Grand Opening begins for the approved franchisee.

 

For more information on How to Franchise Your Business, contact us:

https://www.franchisemarketingsystems.com/contact_franchise_consultants/

 

Making a difference by Franchising your business

Franchising is one of the most powerful expansion vehicles on the planet. It takes a variety of business elements, systems, processes and market characteristics to franchise a business successfully. Most businesses that franchise are driven by the need to capture market share, generate investment dollars or add valuable human capital to the organization by ways of franchisees who invest in the business. Some franchise systems are driven by a greater calling though, one that revolves around giving to a greater good, a cause or something that carries social value. Franchise systems that have a calling, something they wrap the companies core operating principals and mission around have a unique set of advantages.

What does it mean to give back and have a cause that is intrinsically wrapped into a brands “being”? It starts with finding something that strikes an emotional chord with the leadership of the company. Something that wasn’t just picked out of a hat, but truly holds intrinsic value. A Franchise Marketing Systems client, Mosquito Terminators, who sold 87 units in the company’s first 18 months of franchising committed a percentage of overall revenues to give to a charity in Africa that helped kids avoid mosquito born diseases such as malaria. Classic Commercial Services is another example who through the brand’s classic cares platform everyone in the system commits two percent of gross revenues towards those in need. The ultimate example of this paradigm is franchise marketing system’s client Children’s Miracle Network where 50% of all revenues generated through the platform go back to the children’s hospitals the organization is designed to support.

Whatever the cause, it should mean some thing and be entwined into the culture of the organization. As in most aspects related to leadership, it is critical to be consistent with how these charitable causes are tied into every aspect of the business. You can’t be taken seriously in your mission to help people if other decisions you make in the business contradict your stated cause. The way you as the leader of the brand interact with your staff, support your Franchisees and even speak to people on the phone in conversation must align with your brand’s cause.

So how do you find a cause that means something to you? Start by watching the news….pay attention to what catches an emotional nerve and then align with a charity that fills that need. Do research on the charity first, a starting point are charity evaluation sites such as (https://www.charitywatch.org/top-rated-charities). Make sure to do your due diligence and then build the commitment into your franchise expansion plans. The community, your franchisees and your peers will respect and love you for your dedication to helping people and your franchise will grow as a result of this.

For more information on how to franchise your business, contact us;
Info@franchisemarketingsystems.com

When is the right time to franchise your business?

As a business owner, you see, hear and learn new things about your business, the industry and the dynamics that are inherent in a business model. As a franchise consultant, interviewing businesses to help determine when to franchise a business, it typically is easy to recognize how long someone has been at the helm of their ship. There is an evolution of a business owner as they achieve a powerful balance of industry experience, leadership over their business and a keen understanding for the variables which play a part in their business’ success.

Early stage entrepreneurs are drinking from the fire hose and taking in information about the business model at an enormously rapid pace. Their excitement, enthusiasm and energy around what is possible is contagious, fun and always enjoyable to be around. These entrepreneurs typically are not ready for franchise growth as they haven’t figured out the business model and created a solid system which would allow for duplication. Our recommendation is to always start the franchise discussions as early as you see an opportunity for growth, even in this early stage of business development. The planning and strategy can begin early and certainly presents a greater opportunity for the business to succeed in franchising at a later date.

Maturing business owners have been operating the business for two or more cycles and are seeing patterns in their business. They understand the seasonality of the business, employment trends, customer purchasing habits and effective marketing campaigns. Much like a recent college graduate, they are typically excited about the opportunity for growth, but the world is also beginning to present the reality that there may be limitations to the business and good decision making will play a role in how successful the business will be. These business owners could be in a position to consider franchise expansion, but are also still focused on driving profitability and maximizing revenue growth. They would have the ability to write a good franchise operations manual, but there would still be questions throughout the document because every stone had not be turned over.

Businesses that reach adulthood and full maturity are typically three or more years in most cases and have generally maxed out the profitability of a single unit. The business owner is starting to now think outside of the box….how do I replicate this in more than one instance in order to cover more markets and generate more income? Franchising has become a strong consideration along with additional company owned growth, partnerships and new technology. The business is still growing, but at a slower pace and the leadership sees that doing the same thing over and over again won’t continue to grow the business at the desired pace. Mature business owners have become better coaches….they hire slowly and fire quickly and can look at the battlefield with a strategic eye as opposed to being reactive to every day action. The systems and processes are in place that allow the leadership to take a vacation and step away from the business without having a coronary. The ability to teach, train and replicate the business model are a reality and the opportunity for growth is constantly being evaluated.

Many business owners do nothing outside of their day to day management and enter what I have come to refer to “the bored business owner”. Life just isn’t as exciting as it used to be, there is no challenge left in the day as the business owner has seemingly dealt with, overcome and managed every issue the business could present. The business has grown, contracted, expanded and shrunk in some cases several times. Hard work and just pushing the model more with sheer will have grown the corporate business to it’s limits and the operating model is capable of no more. These business owners are sometimes driven to franchising to add excitement back into their professional lives. They want to be bigger than an operator and leverage their experience. In other cases, they may have waited too long to drum up the energy or will to move things forward and take on another endeavor such as franchising. A business owner recently explained that he was going to drop his franchise platform and sell his successful painting business of 23 years in order to start a food concession stand. It seemed like such a shame to not leverage the business model, track record and brand credibility he had built, but the fight was gone and he had apparently just lost interest in the business entirely.

My advice to most business owners considering franchising is that there rarely is a perfect time to consider franchising a business. The variables that should drive this decision should be profitability, systems, market opportunity and people. What can push timelines forward and make franchising a viable option earlier in a business’ lifecycle is the market itself, if people are asking for franchises and the demand is there, the franchise strategy should be considered more seriously. Regardless of what stage your business is in, start the franchise discussions early in order to have a solid plan for expansion in place.

For more information on when to franchise your business, contact us:
info@FranchiseMarketingSystems.com