Expanding a business through franchising requires aggressive thinking, strategic ability and the willingness to drive the new franchise sales pipeline with diligence and consistency in order to build the system, validation and proof required to gain traction. Once a system is moving and the franchisees begin to join in regularity, the most critical portion of the franchise process begins, delivering value to people who have purchased your franchise model. Why is this so important to your success as a franchisor? For one, your franchise success rate needs to be documented in your franchise disclosure document (FDD) and presented to all franchise buyers moving forward, failures, transfers or otherwise within your system. In addition, the contact information for franchisees who have left the system or closed their business also needs to be included in the FDD for new buyers to reference when considering purchasing your franchise model. Good validation and proof that the franchise works are not only critical to your success, but detrimental to a franchise with high failure rates. There are also third party resources where a potential franchise buyer can review the effectiveness of a franchise system and make determinations as to whether they would choose to invest:
The franchise expansion model requires careful selection of franchisees in order to have the highest potential for success with each new unit you open. Selling a franchise is better referenced as awarding a unit as opposed to selling one in a system that is doing it right and being careful as to who is granted the opportunity to be part of the franchise system. When a franchise is awarded, the training and support side of the business begins.
A good dynamic to use in comparison to the relationship between franchisee and franchisor is that the franchise buyer is now your customer. They are a person who has invested with you and should be treated with the same respect and admiration as a customer of your product or service on the consumer side of the business would be. Sometimes it is the simple things that sway a relationship either in the positive or negative direction like buying lunch or dinner, remembering family member’s names or sending a card during the holidays. Good franchisors are great at managing these relationships and make everyone feel special within the franchise system.
The training process should be comprehensive, well thought out and planned accordingly. Enough classroom content and presentation material to make the franchisee feel that their was traditional education offered, but not too much where it becomes mundane and overwhelming. Some well-structured field time should be part of the corporate training as well. It is important to have as little down time as possible, so plan the jobs or client interactions franchisees will see and experience during training. Be open, honest and friendly with franchisees during training, but not too honest, make sure to keep up a professional and value-oriented relationship the entire time. Part of the training should be held at the franchisee’s location and should be really focused on generating business and helping them get the operation up off the ground. Plan on getting your hands dirty as the franchisor and show the franchisee what hard work means in their business and that you are willing to put in the effort, so why shouldn’t they?
Great support means consistent effort and a never-ending commitment to caring about the franchisee’s success. There should typically be a franchise support professional in place for every 10-30 franchise units depending on the model and the system. Good franchisors will have a staff member at the franchisee’s place of business every 1-3 months during the first year of operations and this support schedule will taper off as the franchisee begins to gain confidence and get proficient in operating the business model on their own. Regular mass communications should also be part of the franchise support model through webinars, newsletters, group discussions and reviews of each franchisee’s business. The focus on good relationships should never wane at any point during the lifespan of the franchise agreement.
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