Top 5 Qualities of a Successful Franchisor

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Successful franchisor article

Originally uploaded on 25/10/2017. Updated on 18/04/2019.

The franchisor is the person responsible for overseeing the various branches of a franchise. They have ultimate control over the business model employed throughout their network and must be comfortable giving instructions and providing support. If youre a business owner thinking about expanding your company by franchising, you will become the franchisor. Therefore, you must be clear what this role entails and whether you are right for it.

Similarly, if you are an entrepreneur and interested in becoming a franchisee, you will inevitably be working under a franchisor. A positive relationship with this person is vital, not only for the success of your franchise business, but for your mental wellbeing and sense of fulfilment too. Therefore, you should ensure that you can identify the attributes of a good franchisor, so that when you meet potential business partners in your franchise selection process, you make the right decision.

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Here are five top qualities of a successful franchisor:

1. They can demonstrate a positive track record.

Entrepreneurs choose to start a business through the franchise model because it is a less risky venture than starting a business from scratch. If a franchise has a negative reputation, it is not going to attract potential franchisees. Franchisees will want to be sure that their future business will be profitable before they part with their hard-earned cash. For that reason, franchisors should ensure that they not only have a positive track record, but that it can be backed up by detailed financial projections.

While it may be tempting for franchisors to exaggerate the facts to entice entrepreneurs to invest in their company, the financial forecasts in the franchise agreement and Franchise Disclosure Document must be accurate and attainable. If a franchisor deliberately misleads a franchisee, they will be faced with distrust and a lack of respect, which, of course, will negatively impact the franchise in the long run.

Franchisors should also regularly refer to the guidelines set out by the British Franchise Association (BFA). These form the criteria that a business must adhere to in order for it to be considered franchiseable. Potential franchisors should run and evaluate their business for at least a year to ensure that it would make a good franchise. Becoming a member of the BFA would boost a franchises status even further, showing potential business partners that it is a trustworthy and reliable brand.

2. They have high standards.

If youre a relatively new franchisor, it can be tempting to accept the first few entrepreneurs that submit franchisee applications. Of course, many entrepreneurs will be hesitant to approach a new franchise that has not yet proven its credentials. However, the franchisor must still exercise good judgement when it comes to selecting business partners. Every individual partner will have a significant influence on the business, and franchisees who do not perform well can leave a mark on the whole business revenue and reputation.

For the business to run smoothly, franchisors must select franchisees who are financially, physically and mentally capable of running a business. They must also be able to carry out instructions and work within the companys regulations. In short, if a franchisor is judicious, they can be confident that their business is in capable hands, and chosen franchisees will be able to see that they have invested in a selective franchise that takes success seriously.

3. They enforce brand consistency effectively.

A franchises customer base can be maximised by ensuring brand consistency across the entire network of franchises. If existing customers can see that different branches of the same franchise look the same and provide the same products or services, they will be confident that they will be able to have the same positive customer experience that they had previously. Whats more, if new customers take note of a number of consistent branches, they will perceive the brand to be professional and worthy of their money.

Franchisors must be able to find the line between protecting the brand and being overly protective. Franchisors should implement procedures to maintain standards and reward compliance but also give franchisees the independence and flexibility to build their business in their own territory. The easier the franchisor makes it to comply with brand guidelines, the more successful the business as a whole will become.

4. They are supportive.

Franchisees gain two main things from a franchise: a proven business model and guidance from the franchisor. The quality and quantity of support provided varies hugely from one franchise to another, but all franchisors should offer support of some kind. No franchisee will come on board with all the skills required to run a franchise even if they have substantial industry experience, they will not be familiar with the business unique operational practices.

Franchisors should provide an initial training scheme. This should last anywhere between a day and several weeks. Outside of this established programme, franchisors could offer assistance with site selection, lease negotiation, site set-up, financing and recruitment. Finally, a good franchisor will provide ongoing support in areas such as business management, technical guidance and marketing. These three support levels will ensure that franchisees are set on the path to success.

Franchisors should make it clear what support is available to prospective franchisees when they meet them for the first time. People who are interested in joining the business will want to be sure that they can turn to the franchisor for support if they ever need it.

5. They work to build positive relationships with franchisees.

Franchisees will work best when they know that their franchisor respects them. Good franchisors should recognise that because franchisees work more closely with customers than they do, they can provide valuable insights. For example, the Big Mac and Filet-O-fish sold by McDonalds were developed by franchisees.

Therefore, prioritising open and honest communication is a must for franchisors. This not only benefits them, as they gain ideas to boost profitability, but also franchisees, who will be instilled with a higher level of motivation and morale once they know that their franchisor will take the time to discuss any ideas or issues with them.

If it is not possible to arrange meetings in person, franchisors could arrange regular conference or video calls.

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