It’s all very well deciding you’re interested in running a franchise network, but how do you make your investment opportunity attractive to budding entrepreneurs? In this article, we’re exploring how to create a franchise package to tempt would-be investors.
When you develop a franchise opportunity, you’ll have to consider exactly how your franchisees will use your business model to create multiple profitable units. Promising high profit margins and expert advice isn’t enough. Candidates will be putting thousands of pounds into your company and committing to represent it for years, so they’ll want to make sure the investment is worth their while.
How to create a franchise package to attract investors
Demonstrate your successful track record and expertise
The most important part of any franchise package is a tried and tested business model. Investors will want to know they can use your strategies to replicate the successful units you’ve already launched.
The easiest and most compelling way to demonstrate your positive track record in the franchise industry is to provide information on the branches already in operation. Tell prospective franchisees where they’re based, how long they’ve been open and how quickly they turned a profit.
Create an easily accessible information pack
When it comes to browsing investment opportunities, you can find information on the internet, at industry exhibitions, in franchise brochures and by talking to personal contacts. This wealth of data can be overwhelming and off-putting for prospective franchisees, particularly if details about individual franchise packages are spread across different sources.
You can make life easy for people by creating a single, comprehensive information pack. Include all the details a prospective franchisee would want to know and publish it on your website. If you advertise your investment opening in other places, always include a link to the full pack.
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Review your trademarks
Trademarks and other forms of intellectual property form a key part of a franchise package. Investors will probably be initially attracted to your company based on the strength of your brand name and logo. Opening a business can be nerve-wracking, but knowing you have the backing of a recognisable brand provides comfort in the early days.
Before advertising your franchise package, make sure your brand logo and all your other design features are as strong as they can be. If you need to make any upgrades, go to a professional design or marketing agency and discuss your objectives with the people there. Also, don’t forget to protect your intellectual property before franchising.
Plan your territories
Most franchisors offer exclusive territories, so investors can launch their unit without the fear of facing competition from nearby franchisees. Adding an exclusivity clause into your franchise agreement is a simple way to make your franchise package instantly more attractive.
Also, take the time to plan the areas you’d like to target. Your business model may not necessarily work well in every location, so it’s worth doing some market research to identify regions with high potential. Consider consulting a franchise mapping firm to allocate territories based on their markets and demographics.
Offer exclusive benefits
Investors will expect you to provide a certain level of business support, but you can really impress prospective franchisees by offering extra benefits. Think about how you can help people build profitable and rewarding businesses and which additional services you can offer as the brand’s leader.
When marketing your franchise package, split the business support resources into three categories: initial training, pre-launch guidance and ongoing support. Don’t forget to consider all the different areas of business you could help with, from site selection and staff recruitment to operations and marketing.
Most franchisors will plan a pre-launch marketing campaign, so that the franchisee can hit the ground running. The aim being to have customer activity and hopefully some revenue on day one. This may include local PR, leaflet campaigns, adverts in local press, website pages, Google AdWords and radio promotions.
—Ian Bradley, My Window Cleaner Franchise Director
List your training opportunities
In developing a training programme, you have another opportunity to encourage prospective franchisees to invest. Be sure to highlight all the major and most appealing aspects of your coaching scheme in promotional material. If you’re happy to accept inexperienced individuals, emphasise the inclusivity of your opportunity.
Giving your investors the ability to succeed in your business is crucial. For more information and advice in this area, see our guide to franchisee training and our article on how to build an effective franchisee training programme.
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Make sure there are opportunities to grow
Launching a franchise unit is exciting for many people, but franchisees will probably be interested in developing their businesses and gaining new skills as time goes on. Think about the growth opportunities you could offer as a franchisor.
If your franchise is a van-based business, perhaps you could allow franchisees to build up a fleet of vehicles? If it’s a part-time, home-based opportunity, you could introduce the option to work additional hours or employ staff. Alternatively, you could offer a selection of franchise packages with varying fees and levels of support to cater to investors with different ambitions.
Describe your networking opportunities
Franchisors can support their franchisees by providing the chance to meet like-minded people. As a franchise owner, you’ll lead a number of capable entrepreneurs, and you can help them access extra advice and support just by putting them in contact with each other.
The franchise industry also runs numerous industry events, expos and conferences throughout the year, and actively taking part or providing tickets for your franchisees shows them you prioritise their development.
When you invest in a franchise, you have every expectation and right to know what your money is paying for. A big part of the answer lies in the initial ‘franchise package’ - the range of materials, activities, training and support you can expect before, when and after you become a franchisee.
—Ian Bradley, My Window Cleaner Franchise Director
Justify your fee structure
Franchise fees can appear steep if you don’t put them in context. Make it clear where investment funds go and how people in the network benefit from them. The aim is to show would-be franchisees that by paying the fees, they’re investing in their own unit.
Whether you justify your fees in your information pack or during initial talks with investors, it’s important you can back up both your initial and ongoing costs. Read our guide for setting franchise fees to find out more.
Become a franchise expert
For more franchisor tips and advice, head to our articles page, where you’ll find thousands of data-driven business guides covering all aspects of the franchise world. Alternatively, use the search box to find specific information.
Alice Tuffery, Point Franchise ©