There is so much advice for franchisees out there, from help to make their initial decision on whether or not to enter into this kind of business relationship, to how to overcome the multitude of challenges they might face throughout their business journey. However, we believe there should be advice available to franchise owners considering allowing others to open new branches of their  business. This decision can be just as difficult, so we’re here to point out a few of the challenges you could face as as franchisor, to help you to make an educated decision on what could be a very lucrative venture. 

 

Initial Interest

When you first decide to offer up your business as a franchise opportunity, it is unlikely that people will be queueing at your door to sign up. First of all, franchising in general doesn’t have the best reputation in the business world, as many people view it as a second rate option compared to starting your own company. It’s seen as having less financial potential and many are put off by the lack of freedom involved, however, for those who welcome ongoing support and guidance, and would like to minimise risk, franchising can be the ideal option. In fact, there are already over 750,000 franchise businesses in operation, showing just how attractive it can be. The better the reputation of your business, the more likely you are to attract business partners in this way, as it provides a way for them to hit the ground running. 

Taking on franchisees does involve risk for the franchise owner, so your approval process for potential franchisees is bound to be tough, which is another reason why it might take some time to hear from interested parties. Furthermore, the exit strategy you demand from franchisees needs to be thorough to ensure that longevity is encouraged which, in turn, is another aspect which might dissuade them. However, those with a real interest will be happy to jump through these hoops as they will find the same scenario presented to them when investigating any franchise opportunities. It’s a good way of judging the sincerity of their intentions, so hold tight and give it time. 

 

Providing a Business Model

A thorough business model is a necessary requirement for anybody looking to enter into the business world, not only because it is demanded by financial lenders, but also because it allows you to explore potential challenges and design a plan to follow that will lead you to success. However, while for an individual this might be a fairly simple process, if you’re looking to branch out by taking on franchisees you need to be able to provide them with a business model to follow to. 

Consistency between branches is a crucial part of the franchise model as it helps to maintain a strong brand. This can be a real plus for franchisees as they are provided with a tried and tested approach to running a successful business, without having to experience any of the usual failings involved with discovering this themselves. As whatfranchise.com puts it ‘By its very nature, franchising offers the security of a proven model, which unless you’re the first to be joining an emerging brand has already been replicated successfully up and down the country.’ But for franchisors this involves considering the impact of multiple branches in your business plan, which can be complex. 

 

Initial Training and Guidance

As well as providing a business model for your franchisees, you will also need to supply initial training and guidance to help them set up their branch. Overall, it’s a real advantage for franchisors that they are able to have this level of control over new branches, as it allows them to not only ensure that managers and staff represent the company in the best way possible, but also that branches of their business will upkeep the standard and reputation they have worked hard to build themselves.

Hopefully, you will have already established a solid training scheme for your own employees, as this is a necessity for most business, so you can simply pass this down to your franchisees who can implement it within their own workforces. This is another plus for franchisors who can build on their team with limited investment themselves. 

 

Providing Ongoing Support

Even when franchisees are up and running, you will need to provide ongoing support to help them with any challenges they might face. While this may initially seem like a significant burden, it is actually another opportunity to ensure that high standards are maintained and reflect on your brand. You will have faced similar challenges yourself and the process of passing down this wisdom can be really rewarding. It is also still far easier that starting up these branches yourself.

To make life a little easier, you can set up a handbook and FAQs for budding franchisees that provide them with the information they need without them needing to get in touch with you. The larger your business becomes, the more you can invest in this side of things. For example, you could design software that provides branches with operational systems to use.

 

The Knock on Effect

Part of maintaining a consistent brand is working as a team with your franchisees, and part of this is passing down any changes you make to your business to them, to implement in their own. This elongates the process of each alteration exponentially, but it is worth the extra effort. For example, if you decide to try out a new marketing strategy including price changes, these will need to be carried through each branch. You might assume that franchisees would find this frustrating, however, it is all part and parcel of what it means to be a franchisee. It is important that you ensure that your business model reflects this flexible aspect.

 

Communication

In order to build a happy and successful team, communication is crucial. One of your first steps as a franchisor should be to set up an efficient communication system. If your franchisees need your support, they need to be able to access it as soon as possible. If you’ve designed a change you need them to implement, you need to be able to pass it down to them for them to put into action straight away. 

This can seem like an intimidating challenge but one solution to ensuring that those lines of communication are open at all times is to outsource to a communication provider like Cymphony. They can provide communication experts on a temporary or permanent basis; whenever you need them. They have a large body of staff who can be on hand any time of day or night to ensure that no communication is missed. 

Furthermore, outsourcing your communication to a third party can be a great first piece of advice to hand down to franchisees, as one of the biggest initial changes they will face is handling a ready-made significantly sized customer base. As well as being one of the main advantages to choosing the franchise route, this can also be difficult to manage when you first start, so handing over the reigns of their customer service department while they establish themselves can really help to protect your reputation. 

 

Reputation Impact

This leads me to my next point; the impact that your franchisees can have on your reputation is one of the main aspects of franchising that dissuades franchise owners from choosing this route. Poor management of branches can lead to unhappy customers, and word of mouth can lead to a real PR challenge for the franchise owner trying to protect the business as a whole. This is why it is so important to be a proactive franchisor; pre-empting possible challenges that your franchisees might face and providing solutions and support in the most efficient way. 

 

Leadership

Overall, leadership is an essential skill required if you’re looking to make available franchise opportunities for your business. Key leadership qualities are self awareness and prioritising personal development, strategic thinking, innovation, action and a focus on ethics as well as helping others. Does this sound like you? Great leadership will help you to not only build loyalty amongst your franchisees, but also find the right people to grow this network, allowing your business to go from strength to strength.

As you can see, there are a number of challenges you are likely to face if you do decide to become a franchisor, from limited initial interest and having to provide significant support, to maintaining excellent lines of communication and protecting your brand, but with the right motivation and proactive attitude, it can be one of the best decisions you ever make; allowing you to grow your business with limited personal involvement. 

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