THINGS TO CONSIDER WHEN FRANCHISING YOUR BUSINESS
Your business is successful, busy, profitable and you are ready for your next step. You have options – you can expand your business yourself, start-up in new locations or you could consider the franchise model. With franchising you expand using people who buy-in to your business model and whom run it themselves.
On the surface, that sounds fairly simple, but the reality if you want to make it successful means you need to consider it in an objective manner. Follow these steps and you have a far better chance of getting your franchise off the ground, widening the reach of your brand and delivering extra income for you.
So what are the key things to consider when franchising your business?
1. Check if it is a franchisable model
You may be running your business successfully – but what is it about your business that makes it successful? If it is because it relies on your unique skill or ability and would be difficult for someone else to replicate or would take a long time to be trained, then it is highly unlikely you have a franchise proposition. If it is something that can be replicated or requires skills that are easy to acquire then it is a far more viable idea.
2. You need to document your processes
The key to franchises is that the customer knows what to expect when they use them – it is a replication of a business. To take a huge example, when you go into a McDonalds, anywhere, you know what the menu will be, you know how you will be served, you even know the toilets will be clean. This is because they have strict procedural instructions for every franchisee of how to run that operation. This will require you to document exactly how you run your business; how you take and process orders, how you pack items, how you clean, the systems, managing the bookkeeping and even what products you use. All of this is no doubt instinctive at the moment, but it all needs to be documented so you have a manual that a franchise can take to replicate the business model.
3. Make sure your brand is protected
When you start to franchise your business, the most important element is your brand – that is what you are replicating and that is what you need to protect. If you haven’t registered it as a trademark, both from a word perspective and also the logo itself, then do it before you go any further. It could also be worth investing in a brand manual, similar to the process document, that establishes how your brand can be used – from the font to the minimum size, to the way it can be shown on vehicles to what should appear on a business card.
4. Test to make sure it will work
It may be a great idea, but will it work. The reason your business is successful could be down to something you haven’t even considered like its location or a particular type of customer who happens to live in your town. Testing could mean you set up a second location yourself or you could find a franchisee who will work for a lower investment as you both work out the right way of getting the franchise off the ground. This gives you the opportunity to understand the training that will be required, test the procedural documentation and a myriad of other things that you may not have considered at the outset. Get those smoothed out and when you add the next franchise, you will be far better prepared to support it to success.
5. The legal aspects
You will need to appoint a solicitor who has experience of franchises to put together the legal documentation you will require. They will help you to draw up a franchise agreement and will be aware of some of the key elements to include such as exclusivity, franchise length, whether it can be sold on and how to terminate. It is important to use someone who has prior experience of how franchises operate to ensure all of the relevant aspects are included. Organisations such as the Approved Franchise Association – https://www.theafa.org.uk/ – can be helpful in providing support too.
Franchising your business may very well be the best option for you – but make sure you take the decision with your eyes wide open. We provide expert bookkeeping services in Edinburgh, Stirling and Glasgow to help franchises like yours. Contact us today!