Franchise Your Business – why do some franchisors succeed and others fail?
1. You have all the right ingredients for a successful brand
Systems, marketing model, strong value to the customer and a dynamite track record of success. What does it take to turn your successful business into a successful franchise brand?
Franchising a business is an extensive and long-term strategy for building a business in new markets. Due to the nature of the growth curve and slower ramp-up typical of a new franchise brand, many franchisors don’t allow their brands the time or space to truly take shape and evolve, but there are several key items which can impact the success of a new franchisor.
2. David Vs. Goliath
Start-up franchisors are enormously different from established franchisors. Don’t base your system’s structure and operating elements just on mature franchise systems, what they do isn’t necessarily what a new franchise brand should be doing to be successful.
Fee Structures, territory marketing, approach and business strategy are very different for an organization such as McDonald’s vs. Joe’s Hamburgers which is looking to open its first franchise location. Design a franchise system that facilitates the successful Ramp-Up and introduction to the market and then matures as the system, cash flow and infrastructure begin to shape.
3. Build It and They Will Come
Build a model that is saleable and allows franchisees to justify the investment in a new franchise brand! Focus on the growth of your brand before anything else. So many new franchisors kill early opportunities because of relatively menial contract disputes and getting mired in the details or legal work inherent in franchising. When you franchise your business you are partnering with the entrepreneur to expand the brand and system to new markets – don’t lose sight of this as your ultimate goal is to grow the system and add market coverage in new areas.
4. Sizzle is a Good Thing!
A new franchisor needs to make a splash, branding website, look, feel and overall presentation are magnified in importance with a new franchise system. Prospective franchisees don’t have the same validation when considering an unproven franchise system and therefore will look very hard at things like logo, tagline, website and overall value of the brand.
5. Coffee is for Closers
A new franchisor has one overriding responsibility in building a new franchise system – Selling. Without franchisees to support and without a network of locations to manage, a new franchisor should have an established franchise lead generation budget and a consistent sales effort with franchise sales staff, a defined franchise sales process and attainable franchise sales goals in place. A new franchisor needs to sell franchises, franchising is a sales game when a new brand is first launched.
6. Keep Things in Perspective
Franchising is a long-term growth strategy. The world’s largest franchise brands took years, decades in many cases to build several hundred unit chains. Although franchising allows for rapid growth when compared to other alternative growth strategies, the success and cash flow in franchising don’t come for at least a year into building a new franchise system.
Businesses and brands that get into franchising with the idea that they will see windfalls of cash immediately from franchising are typically the ones that are out of franchising within the first six months.
For more information on how to franchise your business and how to build your business through franchising, contact us.