The benefits of the franchise business model are appealing to entrepreneurs. Why wouldn’t it be? If you’ve already built a successful and profitable business, why not expand it using franchisees’ capital and investment to become bigger and better?
But franchising a business isn’t as easy as many business owners believe it to be. Lack of preparation for the challenges that lie ahead lead to many wannabe franchisors making the same common mistakes. The good news is that these potential pitfalls can be dodged if you are aware of them, plan well in advance and get support from the right people.
So, here’s 5 mistakes that, if avoided, could lead to your business being one of the most sought after franchise brands to invest in.
1. Having an undefined brand
Successful franchise brands are glued together by the strength of their business concept. Being able to effectively communicate what your business stands for is the first box to tick when considering franchising a business. If there is any doubt about your brand, customers won’t ‘get it’ and franchisees will use creative licence to improve the strength of the brand.
This results in lack of consistency within the franchise; which ultimately impedes the overall success of your franchising venture. Ensure you create a strong, simple and clear brand that doesn’t need to be explained. Get this right and it will become the backbone that runs through your whole business.
2. Not being open to change
You will have spent years of blood, sweat and tears to get your business to a point where it’s able to be franchised. Long hours, lack of holidays and sleep have been invested into your business, and quite rightly, you’re protective of it.
The dedication and determination that initially contributed to your success may now be the attributes that are preventing you from wanting to relinquish control of your business. Don’t worry, you’re not alone, but you must ensure that this passion doesn’t lead to the inability to listen to others.
Over time, you may need to innovate to keep up with other franchise brands in your sector. If you can’t listen to feedback from your franchisees and customers and evolve, then you may be holding back the growth of your beloved business. Be open and willing to accept advice when necessary.
3. Holding back information
The franchise business model only works if a business can be replicated, but how do you replicate one of the biggest assets that your business has: you? The truth is you can’t. The experience, expertise and personality that you injected into your business to make it a success won’t be able to be taught to others; but you need to try.
Some franchisors believe they’re the only ones who can do the job right. Many think that it’s impossible to teach others what they know. Or rather, in most cases, don’t want to share the secrets of their success with others. This attitude is not only detrimental to the franchisees that you’ll have recruited, but to your franchise as a whole. After all, your success relies on the success of your franchisees.
When franchising a business, you must invest in comprehensive and accessible training materials that will help franchisees to understand and implement what it is that makes the business work. Having robust initial and ongoing training programmes in place will empower your franchisees to grow and develop; both personally and professionally.
4. Not investing in sound legal advice
Building a franchise business model can be complex. Possibly the worst mistake that you could make when just starting out is ignoring sound legal advice or not consulting a solicitor at all. The main reason that many entrepreneurs give for not seeking legal advice is the high costs that are associated with appointing a solicitor.
Yes, starting a franchise business takes a lot of investment, but avoiding the cost of a reputable franchise solicitor at this stage, may just cost you more in the long run; both financially and emotionally. It’s too much of a risk to cut corners when it comes to making legal decisions (and there’s lots of them) so find a good solicitor that specialises in franchising. No matter how much it costs, you can sleep well at night knowing that you’ve enabled your franchise business to get off to the best possible start.
5. Not promoting your franchised business effectively
As a franchisor, you not only have to worry about attracting customers, but also how you appeal to quality franchisees. Both are crucial to the success of your franchise.
Ensure you use a mix of traditional and digital marketing techniques so that people know about your business, and why they should choose you over the competition.
Most franchisors have marketing plans in place for the overall franchise. The national plan generally includes TV, radio and press advertising, online marketing, social media promotions, and direct mail and email campaigns; therefore, brand recognition is widely established. Having such a robust marketing plan in place will also appeal to franchisees who will benefit from the brand equity.
By avoiding the above mistakes, you’ll be well on your way to building a successful and profitable business. Just bear in mind that when it comes to recruiting franchisees that you choose the right ones to represent your brand. It’s easy to feel pressured to sell franchises quickly when you’re just starting out, but this may result in you taking on franchisees that are not a good fit for your business.
You don’t want to work hard to get everything right for your new franchise, if you then fall at the final hurdle. The best way to ensure that you only recruit the best individuals as your franchisees is to remove any pressure to make quick decisions. Have adequate capital in place to give you breathing space to move at a slower, more measured pace to choose the best possible franchisees.
The Editorial Team, Point Franchise ©