Getting the basics right: Developing your franchise infrastructure.

Not all franchisors think about the complexities of franchise infrastructure before they begin growing their business. This is a big mistake. Franchise infrastructure should be carefully considered, and a great deal of research needs to be done if you're to ensure your franchise rests on healthy, solid foundations. Here, we take a look at what franchise infrastructure is and how you can effectively develop your franchise's infrastructure.

What is franchise infrastructure?

Franchise infrastructure can be defined as the organisational structures and arrangements that allow franchises to function, expand, and grow. It includes factors like training and support schemes, franchise sales, supply chain logistics, marketing, and legal teams, amongst other things. When thought of as a whole, these distinct and divergent areas of business operations constitute the franchise’s infrastructure. They’re the lifeblood of the franchise and establish the processes, procedures and protocols that will define the franchisee/ franchisor relationship. Essentially, they’re the scaffolding around which the franchise is built and without which it would collapse.

Training and support

One of the essential pillars upon which the entire franchise rests is its training and support schemes. Without efficient training and support systems, franchises are going to find it difficult to ensure that standards are maintained across the franchise network, that all franchisees understand the protocols and procedures they're expected to follow, and that franchisees receive the assistance they require.

Training and support systems are often the first piece of infrastructure put in place by a new franchise. Though they'll grow in complexity and scope with time, they may be rudimentary at first and provide franchisees with only the bare minimum of information required to get their franchise unit up and running. This is mainly because most franchises start off with a small managerial team that's composed of individuals who hold down multiple roles. As the franchise grows, it will be possible to introduce training and support specialists to refine the system.

Franchise sales and growth

After establishing a training scheme, it’s probably going to be necessary to hire a franchise salesperson. This individual will be responsible for attracting new franchisees, selling them the franchise experience, and expanding the franchise network. It’s an important role that requires a talented employee who understands what kind of franchisee you’re looking for and knows how to convince them that joining your franchise is an unprecedented opportunity. For this reason, it's vital that you hire someone with a great deal of experience in franchising. A salesperson who’s only interested in raising their numbers and cashing commission checks will do your business no good. Rather than grow it effectively, they’ll try and bring anyone and everyone on board. This may expand the franchise quickly, but it will also hasten its collapse.

Field support

The franchise business model depends on a healthy relationship between the franchisor and franchisee. As the franchise network expands and there become too many franchisees for one person to manage, these relationships will need to be nurtured and maintained by field support representatives. They’re responsible for managing small numbers of franchisees, ensuring everything is going to plan, and offering the franchisor regular reports, updates, and communications from the franchisees in their care. However, these representatives don’t just liaise with the franchisor and franchisees, they also need to ensure standards are maintained, the correct procedures are followed, and that adequate support and guidance are provided.

Bring it in-house

At first, it will probably be necessary for you to outsource many jobs to other service providers. For instance, web development and legal assistance are two areas of operations that franchises rarely handle themselves when they first start out. These are outsourced because the franchise has neither the financial nor human resources to fill the roles and won't have them until much later on in its development. However, there will come the point where it makes financial and operational sense to bring these departments back in-house. When and how you do this will vary from business to business, but these areas are typically the last parts of infrastructure a franchisor will implement.

Constant evaluation

As you grow and develop your franchise, it's necessary to reassess and reevaluate the business' changing needs constantly. At different stages of its expansion, the franchise will have different requirements. As we’ve already mentioned, many business roles won’t be necessary until your existing staff are unable to handle the workload, or don’t have sufficient expertise to perform the role to a high enough standard. There will be times when you have to bring in specialists to perform certain roles. On other occasions, you may have to begin creating in-house teams able to perform work that's being outsourced. In the vast majority of cases, franchise growth is organic, and it’s necessary to react to shifting circumstances in ways that strengthen the franchise’s infrastructure and ensure it’s well set up and capable of handling expansion.

Benefits franchisor and franchisee

A functional and robust infrastructure benefits both franchisor and franchisee. Principally, the infrastructure is composed of the structures and mechanisms for managing franchisees and ensuring that all the franchisor's responsibilities are met. The franchise system is supposed to operate as a mutually beneficial model. If the franchisee is happy and prosperous, the franchisor will be satisfied and successful. Without a robust infrastructure, franchisors are limiting their franchisees' chance of success. Consequently, they're reducing their chance of success and minimising profits.

Conclusion

To develop a healthy and stable franchise infrastructure, it’s important for franchisors to understand what they need to prioritise and what can come later. For the vast majority of franchises, training programmes will be the first step, followed by franchise sales. However, after that, each franchise will develop in its own unique way, according to its individual specific needs and requirements, as well as the prevailing market conditions. If you’re to get the most from your franchise investment, you’ll need to plan ahead and consider ways that you can grow the infrastructure in effective and cost-conscious ways.