Turn your business into a franchise
So you went the entrepreneurial route when you started your business. Now things are going great and you’re ready to expand. You want to get the revenue rolling in quickly, and you don’t have time to open loads of stores by yourself, let alone supervise them all. It may be time to turn your baby into a franchise business. Before you start selling off franchises willy-nilly, there are some crucial details you’ll need to sort out to make sure your franchise business is as successful as your flagship.
Are You Ready?
Items are flying off the shelves, there’s often a queue outside at peak times, or it’s impossible to find a table on a weekend evening. That’s great, your business is making money and gaining a following. But there’s a big difference between having one or two popular locations and having a franchise business with a whole fleet of busy locations. The last thing you want to do is kill your momentum by expanding too quickly. Do market research to make sure there is enough demand for your product to support more locations and figure out how many new shops you want to open, and where.
You’re gearing up to go nationwide, maybe even international, joining such brands as Gelatissimo and Coffee Club as single-location startups that have grown into franchise business empires. Before potential customers all over are laying eyes on your logo, you want to be sure to have your branding in place and trademarked. It’s going to be everyone’s introduction to your business, so you want to have a logo and tagline you’re happy with and that spells out what you’re all about. Once people begin to know your brand, it’s too late to make major changes. This is your introduction to millions of potential customers, and you want to make a good impression and be instantly recognisable.
Every franchisee you bring on board will sign a franchise agreement detailing how they will operate. It’s your job to decide how you want the franchises to run. In your franchise business model, you’ll lay out the franchise fee, the territory the franchisee operates in, whether franchisees buy or lease equipment from you, whether franchisees can own multiple units or are limited to one, and anything else proprietary. You want to come up with an easy system to follow so franchisees can open locations quickly and hit the ground running. Make it clear, consistent, and easy to replicate.
You need to spread the word about all the new locations you have opening up, and you need a plan in place to attract new customers. If it pays dividends down the road, every marketing dollar you spend is worth it. But it will only be worth it if you have a well-researched, targeted plan. A telly advert that runs during a programme very few of the customers you want to attract watch isn’t going to do you much good, even if you got a “good” price on it. If the right people don’t see it, or the message doesn’t connect, your franchise business will experience a lot of growing pains.
Hire a lawyer
All of this can get complicated, and you don’t want to end up in disagreements with your franchisees, make a costly mistake in the franchise agreement, or have another company rip you off. You need to comply with the Franchising Code of Conduct. If you’re going international, you need to be in compliance with the laws of another country, where hiring practices and wage parameters might be completely different. Trying to go it alone is not a good idea. The Franchise Council of Australia has a Franchise Academy that can help understand the basics, and The Franchise Lawyer and Legal Vision are good resources for finding an advocate.
Focus on the Big Picture
Up until now, you’ve been running day-to-day operations at one or two locations. You’ve been able to be hands-on, even serving customers or greeting them as they come in. That’s not something you can do at dozens of locations every day. It can be hard to let go of your baby that you built from the ground up, but you have to bring on good franchisees and trust them. Take a step back and become more of a brand ambassador for your franchise business. It’s still your baby, it’s just growing up.