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What's involved in Franchising my Business?

It is true that almost any business can be franchised. However, not every business can be franchised successfully. The first thing we aim to do is to step back and objectively identify whether franchising is right for you. A business ready for franchise should be credible, sustainable, teachable, unique and profitable.

If together we decide that franchising is suitable for you, we will take you through the process step by step to ensure that the transition to franchising happens smoothly. We have broken this down into 5 simple stages:

Stage 1 – Feasibility Study

Franchising requires rigorous preparation. We will help you to identify the key questions that need to be addressed in the stages leading up to franchising - what your business will offer to franchisees, how your financial projections will look, and how to recruit the right franchisees for the right territories.

 

Stage 2 – Pilot Operation

Smaller failures are easier to take than big ones. Pilot operations allow franchisors to test the water, proving that what you will be offering franchisees will be a viable franchising opportunity. Running at arms length from the main operation, a pilot outlet also allows you to test the adequacy of franchise systems, procedures and training before rolling it out on a larger scale.

Phase 3 – Operations Manuals

The operations manual is the greatest tool a franchisor possesses. From major issues such as local marketing right down to the minutiae of daily life, the operations manual sets out a detailed explanation of the business system and how it is to be operated. AMO Consulting can help you to put together the most important instrument in the day to day running and development of your business.

Stage 4 – Franchisee Recruitment

Franchisee recruitment is one of the most important parts of the process. Having good franchisees is imperative to the growth of your business. AMO can guide you through the recruitment process, developing advertising campaigns and interview techniques so that costly mistakes can be avoided.

Stage 5 – Support Systems

Your initial training and support of franchisees must be first class. The input time required from you, as a franchisor, cannot be underestimated – be prepared to invest that time. 

We will make sure that the business processes and systems have been streamlined and are as simple as possible, so that your franchise will be as successful as possible. 

Why use franchising in your business?

There are many reasons why an increasing number of businesses are turning to franchising, here are just a few:

 

Network Growth

When you franchise a business, you bring in the financial backing, dedication and manpower of a local franchisee to drive your business forward in their territory. This allows your network to grow much more quickly and a lot more cheaply than ‘organic’ growth. You, the franchisor, have few costs because the franchisee pays for all the equipment and set-up costs as part of their franchise fee. 

Brand Consistency

Franchising does not necessarily mean a loss of control. If the system is set up properly, each franchisee will be bound by a strong Franchise Agreement and Operations Manual. These documents set out exactly how the franchised unit should operate. Indeed some of our retail clients go to the extent of producing ‘Look books’ (Documents that detail exactly how the store should look – right down to the length of a sleeve on a mannequin).

 

As a franchisee is bound by the agreement to run the business in accordance with these documents, any variations could lead to repercussions for the franchisee. The greatest testament to a franchised business is when a customer does not know that franchising is being used. The look, the feel and the experience should be the same wherever they go.

Recession Resistant

No Industry is recession proof. However, businesses that use franchising have been proven less likely to fail in a recession than others. According to one of the recent bfa and NatWest annual surveys: “The recession appears to have had a limited negative impact on profitability, turnover and employment and business failure”. One reason for this level of security is that franchisors tend not to be exposed to the high levels of debt and overheads that are involved in non-franchised businesses. However, the main reason for me is that each business in the network is run by a dedicated franchisee who will work tirelessly to protect his or her business.

Less Hassle

In a franchise the day-to-day administrative burden is shouldered by franchisees. This allows the franchisor to focus on developing and expanding their franchise community. For example, one particular area of administration is staffing.

 

With franchising, staff are employed by the franchisee therefore any problems are the franchisee’s to sort! Naturally, the franchisor has to be on hand to provide support to franchisees when required, however this is a lot less hassle than trying to do everything yourself.

 

Call now on +44 1357 523308 or email Euan@amoconsulting.com

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