The first thing to understand is that franchising is not a tool to fix a bad business. It is not there to provide injections of income from other people to underpin the failing elsewhere. Franchising is a model used to replicate a successful and proven business, using the investment and skills of new individual business owners, who will be trained and supported to run the business under the agreement, conditions and format, as proven and agreed. So think about it; if you use it on a bad business, all you get is a bigger bad business - and a lot of upset franchise owners.
Set up to accredit and promote excellence in franchising, the bfa accredits franchisors based on a code of business practice and the European Code of Ethics for Franchising. As a result franchising now encompasses a multitude of business types and consumer markets and has well established itself as a respected and highly regarded business model.
To franchise a business is not something that can be done without thought. To start of with, the business needs to be proven - it actually needs to have happened - not just the idea on paper. You need to show potential franchisees that the business works in the way in which they will need to run it. It also needs to be transferable - it needs to be able to operate in multiple locations, using the same system, brand and quality. As a key point in this, the franchise also needs to be something that you can teach people to do. There is little point having a franchise that only three people in the world would be capable of running.
to franchise a business is not something that can be done without thought. To start of with the business needs to be proven - it actually needs to have happened
If your business passes these vital checks then you can start to look at what you need to do in order to turn it into a franchise. This process will require the production of operation manuals, to show how everything must be done and a franchise agreement will also need to be written to set out how the relationship and agreement between the franchisors and franchisee will work. It is also there to protect the network and your brand.
You will also need to think about territory: how you are going to set out what areas people may need to limit themselves to if they join your franchise. You will also need to think about the training and support that will be required. If you are investing into franchising your business, then you will need to make sure that your franchisees succeed.
All of this planning, building and ongoing commitment will cost you money so it is also important to think about how to finance the work. At this point you must make sure that you don't underestimate the costs and try to cut corners. When it comes to speaking to banks, it is advisable to make sure you speak to the three bfa accredited banks. They will be able to get a better idea of your business and how it operates. This means that when your potential franchisees approach them to raise capital, the banks will already understand aspects of what will be required.
Once you have made all the necessary checks, received all the necessary expertise and are now set up, ready to franchise your business, there is one last aspect to consider - recruitment.
Recruitment takes two forms. The first is the staff that you may require to support the franchisees and ensure a healthy network. The second is the recruitment of the franchisees themselves. This can be done through a number of channels, such as your own direct marketing, advertising in the main franchise publications or franchise sections of newspapers. There are also websites to promote your business and even major franchise exhibitions, supported by the bfa. The important thing is to make sure that you look at all the options and make sure that you are investing in the selection of options that are going to work for you.
For more information on franchising, educational seminars and the ethics of franchising visit www.thebfa.org
