Franchisor Tips: 6 Mistakes to Avoid When Running a Franchise Network

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Mistakes as a franchisor

Running a franchise network is a great way to expand a business quickly, but it isn’t as easy as many people think. A lack of preparation for the challenges ahead lead lots of ambitious franchisors to make the same common mistakes. The good news is, you can dodge these potential pitfalls if you’re aware of them. 

As a resource for professionals in the franchising world, we can offer some guidance on how to run a successful franchise network. We’ve rounded up six of the most common franchise mishaps and listed the solutions to help you build a profitable business without tripping up. 

6 franchise mistakes to avoid

1. Not defining your brand

A strong business concept is the glue holding a franchise brand together, so you must be able to identify and effectively communicate it when franchising your company. 

If there is any confusion surrounding your brand, customers may not understand it and franchisees will use creative licence to take their own approach. Ultimately, a weak brand results in a lack of consistency, which limits the overall success of your venture. 

The solution: Develop a strong and simple brand before you pursue franchising. Your concept should be clear to anyone entering your business or visiting your website, and you should make sure you reflect your values in the day-to-day life of your business. 

2. Not being open to change

By the time you start recruiting franchisees, you will have spent years developing your business and putting new practices in place. You will probably have worked long hours and lost sleep over your venture, so it’s only natural you’re highly protective of it. 

However, as a business owner, you should be willing not only to adapt your brand over time, but also relinquish an element of control to your franchisees. Fail on either of these points, and you may fall behind the competition. 

The solution: Take some time to accept the changes you’ll need to make in order to convert your business into a franchise network. Try to see the bigger picture, and the successes you can achieve if you let go of certain elements. As the years go by, you should carry out market research and adapt your franchise in order to keep up with competitors and industry trends. 

Also, be open to feedback from business partners, franchisees and customers, as this should help you improve your brand. 

3. Holding back information

Some franchisors believe they are the only ones who can do their job properly; others won’t want to share the secrets of their success with outsiders. It’s easy to take this stance if you’ve built up a business from scratch. 

Unfortunately, this attitude can be extremely detrimental to your franchise. After all, your success relies on your franchisees’ ability to do their jobs well. 

The solution: When franchising a business, you must leave your ego at the door and invest in comprehensive and accessible training materials to help franchisees understand how to effectively replicate your business. Having robust initial and ongoing training programmes in place will empower your franchisees to grow and develop, both personally and professionally.

4. Not taking legal advice

Setting up and running a franchise network is a complex process, and there are numerous legal complications you’ll need to sidestep. Although you’ll be spending a significant amount of money developing your business, it’s important you invest in legal advice. 

Avoiding the expense of a reputable franchise solicitor at this stage may just cost you more in the long run, both financially and emotionally. 

The solution: If you try to cut corners when it comes to making legal decisions, you’re taking a huge risk, so find a good solicitor who specialises in franchising. It may dent your budget, but you’ll be able to sleep well at night knowing your franchise business is complying with the law. 

5. Not promoting your franchise effectively

As a franchisor, you not only have to worry about attracting customers, but also quality franchisees. Both are crucial to the success of your franchise. 

Most franchisors have marketing plans in place for the network as a whole. National promotion schemes generally include television, radio or press advertisements, as well as online marketing, social media content and email campaigns to spread the word widely. 

But fail to create effective promotional material, or advertise in the wrong places, and you’ll limit your franchise’s success. 

The solution: Use a mix of traditional and digital marketing techniques to tell people about your business and why they should choose you over the competition. Research your target audience and the advertising channels you should use to reach them. 

What’s more, you should also aim to publish new website and social media content regularly to boost your search engine ranking position and engage readers. 

Having such a robust marketing plan in place will not only attract franchisees, but also show them what they stand to gain if they join the business. 

6. Expanding too quickly

It’s easy to feel over-excited and try to get your franchise up and running as fast as possible. But when it comes to business expansion, rushing can be disastrous. 

If you grow into territories with low demand for your product, you risk tarnishing your franchise’s reputation. If you feel pressured to recruit franchisees quickly, you may welcome unsuitable investors into your business. Ultimately, moving too quickly can lead to franchise failure. 

The solution: The best way to make sure you set yourself up for success is to remove any pressure to make quick decisions. Don’t progress to the next stage until you have enough capital in place to give you the time to move at a slower, more measured pace. 

Research is also vital throughout the process of franchising your business. At each step, make sure you have the insight and understanding to make an informed decision. 

More guidance for entrepreneurs running a franchise network

Point Franchise is a fantastic resource for aspiring and existing business owners. See our catalogue of recent franchise guides or type a topic into the search bar to find more information. You can also find out about the latest changes in the franchise industry with our daily news articles.

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