Being the founder of a new concept is no small feat, so make sure you’re clued-up on these essentials
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Creating any new business is a treacherous task, one which should only be embarked upon with the utmost care. Having started one myself, I know how isolating an experience it can be, especially without the warm embrace of a franchise model.
It’s not often that a new enterprise will set out with the sole purpose of franchising its brand. More often than not, only when customers begin to ask how they can invest in the same model or look to buy into one of their own, does the owner finally start to think that they have a business worth replicating.
So whether you’re partway down this long winding road, or you’ve just started your journey, I’ve noted some tips and tricks that we at d&t have learned, to help you avoid some of the inevitable pitfalls ahead, but also to steer you towards some great nuggets of wisdom, too!
...run before you walk
You will remember this famous idiom from growing up, but it also applies to franchising, where we see many budding franchise systems fall over (pun intended) if the proprietor is looking too far ahead to see their own feet moving forward. Of course, you want to be keeping an eye on the horizon, but the key thing is you don’t grow beyond your means of support as your model will quickly crumble around you. Invest in the right systems, CRMs, and support staff to ensure a risk-averse sustainable growth.
...fill territories willy-nilly
In the early days of your franchise, this is of paramount importance; as of yet, your business is a relatively unproven concept in the world of franchising. Chasing the short- term benefit of a franchise fee is not a sustainable footing to build your network to national dominance. The banks will be reticent to lend your franchisees the capital they need in the early stages. If you have any black marks against your business (franchisee failures), then they will quite simply refuse to fund any future endeavors. Don’t give them the reason to doubt your franchisees’ success.
...under-value your proposition
It might be easy to think that the best way to attract new franchisees is to set a low franchise fee, but that simply isn’t the case. As a new franchisor, your brand doesn’t have the same commercial worth or brand reputation as others out there. Regardless, your franchise investment needs to cover everything that your new franchisee needs to get them up and running. Make sure you account for all training and support, as well as the less tangible elements that go into supporting the growth of any early adopter of the system.
...forget to ‘RTM’
It can be very easy in the early stages with a new franchisee to cover them in cotton wool and waste lots of your time and that of your support team, in repeat training a franchisee – especially in something that is already contained within your operations manual. So, using a term our very own MD is fond of RTM (or, “Read the Manual”!). Where necessary, a colorful adjective can be inserted into this sentence to reinforce the statement…but I’ll leave that up to you.
A lot of time, money, and energy goes into writing the operations manual, so make sure your franchisees are using it.
...put business plans in a drawer
It happens all the time, with any type and size of business. Much like the operations manual, this can quite easily be put in a drawer, never to be referred back to again. Yes, it’s a tool for acquiring franchisee funding.
Yes, it’s part of your franchise agreement. But it’s also the perfect tool to track your franchisees’ performance. This has been created – hopefully using a franchise expert such as d&t – to be a realistic financial forecast for your franchisees’ businesses.
“A lot of time, money, and energy goes into writing the operations manual, so make sure your franchisees are using it”
It happens all the time, with any type and size of business. Much like the operations manual, this can quite easily be put in a drawer, never to be referred back to again. Yes, it’s a tool for acquiring franchisee funding. Yes, it’s part of your franchise agreement. But it’s also the perfect tool to track your franchisees’ performance. This has been created – hopefully using a franchise expert such as d&t – to be a realistic financial forecast for your franchisees’ businesses.
...seek expert franchise advice
This may seem like a shameless plug for service providers such as d&t, but the simple fact is, speaking to the right franchise professionals early on can make a big difference to the overall success of your franchise model.
Think of it the same way as to why someone would invest in your franchise: you’ve made all the mistakes, so they don’t have to. The case is the same for you as a franchisor. Speak to an expert who has seen all the mistakes that you (might) be heading towards.
...create a territory map
Another common mistake that franchisors make is to map out all the territories in their country. Depending on the demographic you’re aiming for, you will have a hundred different variables that go into making sure you are setting viable territories for your franchisees to manage.
Not only that, but you want to ensure that you’re selling the same thing. Any two cities in the U.K. don’t equal the same opportunity, for example.
...grow your support team
This will vary from franchise to franchise, but in essence, as your franchisee numbers grow your franchisor support team should do so also. Best practice dictates that you should have a minimum of two face-to-face meetings with your franchisees per year: one mid-way through, and one at the end of the year, to get their business plan and do a complete review of what challenges and hurdles they are facing, go over all their marketing strategy, and, hopefully, to give them a big pat on the back.
We all know that in actuality you will have more touchpoints than this, but make sure that you have the resources to give your franchisees the time they need to grow.
...define your USP
Your unique selling point (USP) is just that: the thing that defines you as a business, apart from all the others out there.
What sets one accountancy practice apart from another? At d&t, we know that our USP is in our ability to support the growth and development of franchise models across every aspect of their journey; from franchise funding, right through to compliance with HMRC.
“Celebrate your success and revel in the support and advice you’re passing on to those in your network”
We are experts in franchise network accounting and have a history of delivering exemplary service and adding value, not (just) numbers to your business. You will likely already know what your USP is, so stick to it, own it, and make it a pillar for all out there to recognize you as a cut above the rest.
...enjoy your work!
It’s very easy to lose track of why you got into business in the first place. Don’t bury your head in the day-to-day, without looking up and realizing what you have. Celebrate your success and revel in the support and advice you’re passing on to those in your network.
I’m lucky enough to meet with lots of franchisors, old and new, and the one thing that I always love to see is someone who still clearly loves their brand – they live and breathe it.
Creating and sustaining a successful franchise model doesn’t happen overnight, and is only done by surrounding yourself with like-minded franchise professionals who can help support the development and growth of the business in a sustainable manner.
James Thomas, QFP, is the commercial manager for d&t
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