One of the key advantages of the franchise model is the level of support, guidance and assistance franchisees can expect from the franchisor. In many instances, a franchisor will offer a support programme that's truly exceptional. In such cases, being a franchisee isn't just profitable, it's also educational. However, some franchisors will offer very little support. Establishing what level of support you should expect can be challenging, so we’ll take a look at the different types of training schemes on offer and why they're beneficial.
What do you need to know about franchise support?
First and foremost, it’s important to recognise that the level of support provided will vary from franchise to franchise. Each business will implement a support system that reflects their interests, needs and goals. To a large extent, support also depends on the financial capabilities of the franchise. A well-established, resource-rich franchise can dedicate a great deal of time and money to ensuring that their franchisees receive the training and guidance they require. A new or under-resourced franchise may not be in the position to do so.
Secondly, the support structure will be established in the franchise agreement, alongside clauses relating to the franchise fee and the obligations each party has to one another. In theory, this means that prospective franchisees should be able to find out what level of guidance they can expect to receive. However, what a franchise promises and what a franchise delivers aren’t always the same. Consequently, it’s a good idea to talk to existing franchisees before signing a franchise agreement. More often than not, they’ll provide you with an honest account of how much support they received from the franchisor.
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Different types of support
So, how does this franchisor support manifest itself? There are a few different ways franchisors can ensure their new recruits succeed.
Although it won’t always be the case, some good franchises may be able to help you get the funding needed to start your franchise unit. This typically happens in one of two ways.
Firstly, many franchises have partnered with major lenders to ensure that suitable franchisees can obtain the level investment they require relatively easily. With the backing of a franchise, many franchisees can get up to 70 percent of the capital needed to launch their business. This is particularly true of franchises that are affiliated with the British Franchise Association (BFA), as lenders can see that they’re not just handing money over to a franchise, but one that is reputable and likely to turn a profit.
Secondly, some franchisors help their franchisees write their business plans to present to lenders. If you’re going to borrow money from an official lender, you’ll need to have a watertight business plan. Lay out all the information you have, and any financial projections you can make for the future of your business. Franchisors’ experience and expertise can prove invaluable, as they’ll be able to tell you about the past performance of other franchises in the network, allowing you to develop accurate forecasts.
2. Selecting a site
Selecting a good location and developing it in the right way is integral to the success of a business. If your business isn’t ideally positioned to attract customers, it’s highly likely that it won’t succeed. Consequently, franchises often support their new franchisees in finding a suitable site and preparing it for business.
Of course, the process isn’t as simple as finding a fantastic location and sorting the paperwork to rent or buy it; you’ll need to balance your priorities and be realistic about what you can afford. Opt for a commercial property in the centre of town with high customer footfall, and the rent may be so high, your sales income doesn’t cover it. Go for a site in a quieter, residential area, and you might not make enough sales to keep your business afloat. You should also bear your target market in mind; a mobility product store on a university campus isn’t exactly going to rake in money, for example.
In some cases, the franchisor may outsource this process to a knowledgeable, local real estate agent. In others, they'll perform it in-house. If they do partner with an external organisation, it will typically be with one that has experience of both franchising and the specific industry you’re operating in.
3. Initial training
The vast majority of franchises will put new franchisees through an extensive training programme. It’s what makes franchising so attractive to many entrepreneurs, as it allows them to join a new business – or even a new sector – with no previous experience. Very few franchisors expect their new team members to have knowledge of the industry, so the training acts as an essential introduction. For franchisors, it’s also a way of ensuring that standards are maintained across the entire franchise network.
The initial training period will vary in length depending on the complexity of business operations, how much information the franchisor wants to impart and the level of funding they're willing to put into it. Common topics covered include business and financial management, operating digital systems, hiring and training staff, and marketing. You may have to pass certain tests before you can start setting up your business, but the training scheme should ensure you have all the skills and know-how you need to ensure it’s a success.
4. Ongoing Training
Many franchises offer ongoing training opportunities to their franchisees. These can take the form of workshops, seminars or conferences, and attendance may be voluntary or compulsory. Good franchisors will go out of their way to provide ongoing support, as it’s in their best interests to ensure franchisees are working at the top of their game. You should also take advantage of any networking opportunities that come your way. By organising these, the franchisor can make sure franchisees have the chance to mingle and discuss ideas with fellow entrepreneurs, boosting not only their profitability, but their morale too.
Franchisors may also play a role in the training of new staff to support franchisees as they develop their business, but the majority leave this up to the franchisee. However, in specific industries, it's normal for the franchisor to invest in further employee training to ensure that standards of service are maintained across the board.
5. Guidance, support and assistance
As well as organising official training events, most franchises will offer their franchisees ongoing guidance and support throughout the franchise agreement. In many cases, the franchisor will designate a specific member of their management team to liaise with and support new franchisees.
The nature of this relationship will vary depending on the franchisor’s management style. In some cases, the franchisor will ask an experienced franchisee to act as a mentor to a newer franchisee, while in others, they’ll use one of their management team. However, it’s important for franchisees to understand that they can also look for support outside of the established franchise structure. You may have previous business partners that can offer guidance, or friends and family members who may be in a position to help.
6. Marketing and advertising
Finally, the majority of franchises will have control over national advertising and marketing campaigns. In part, this is because franchises should be able to determine exactly how the brand presents itself to the general public if it is to succeed. A brand that is portrayed consistently across its network will come across as more professional and competent to consumers. A shoddily designed marketing campaign may not just have no effect – it could impact negatively on the business. That’s why it’s vital that franchisors regulate the marketing activity across the brand.
However, franchisees are often responsible for local campaigns. You’ll probably receive guidance and promotional or branding materials to base your marketing activity on, but you’ll have to organise any campaigns yourself. Again, this has a lot to do with how the business’ trademarks are used and how the franchise markets itself. Whether you decide to put an advert in a local paper, appear on a regional radio station, put up posters or create business profiles on Facebook, Instagram and Twitter, you’d be sensible to raise awareness of your business in some way.
Not all franchises are alike. One of the primary ways they differ is in the amount of support they're able and willing to give. The different types of guidance we've listed above are the main ways franchisors offer help, but not every franchisor will provide all of them.
However, before you sign a franchise agreement, it's vital that you understand precisely what is being offered by your chosen franchisor. To do this, you could enlist the help of a franchise solicitor who has experience working with franchise contracts. They’ll be able to tell you whether there are any areas of concern or whether you’ll be bound to any specific obligations once you’ve signed. But once you are happy with the contract and sign it, you’ll be able to access the wealth of expertise and learning resources provided by your franchisor, before setting up a successful, profitable business.
Alice Tuffery, Point Franchise ©