Partner Article

How to franchise your successful business

Ian Sharland, business development director at Baby Sensory takes us through his tips for successfully franchising your business.

Before you decide to franchise your business you need to be confident that others will be able to operate your business model as successfully as you do. It is also important to recognise that your role will change. Instead of focussing all of your effort on your own local business you will be expected to support others and invest in your concept such that you remain ahead of your competitors.

Preparing your business for franchising

1. Choose an appropriate name

Changing a brand identity will be very expensive once you have established it so it is important to get your name right from the outset. The name should tell customers what you do; this will also help with web searches.

You will need to secure web domains and trademarks. It is therefore vital to research the name to make sure that it has not already been taken. It may also be wise to secure a word mark so that competitors cannot use your name. To secure a word mark your name must be distinctive and not
descriptive. Seek advice from trademark specialists before choosing the name and applying for an EU wordmark.

2. Design your system so that others can operate it

Before we franchised the Baby Sensory programme it was running successfully in two locations operated by our founder Dr Lin Day. Lin had many years of relevant experience, a first class local reputation and a wide range of equipment acquired over a number of years. This was a tremendous asset. It was however necessary to develop a detailed manual, lesson plans and training courses such that others could run the programme without the full benefit of Lin’s extensive experience. We also identified a core set of equipment necessary for the effective delivery of the programme and built the lesson plans around this core set of equipment.

3. Have a very clear idea of your Unique Selling Points

The first thing most prospective franchisees will want to know is how your product or service is better than that of your competitors. This will be particularly vital in the early stages as you are unlikely to have a well know brand to fall back on. It will be important for you to have a clear answer to this question and for you to have researched the market to make sure that your advantage is not merely one you hold over your local competitors.

4. Set clear, achievable growth objectives

You should have a very clear idea of your growth objectives from the outset. We started by defining the size of each of our territories so that we knew how many franchises we could sell in the UK. We thought from the outset that a realistic objective would be to fill 50 per cent of the 250 available
territories within 5 years. We also recognised that growth would accelerate as our brand became more widely known. We saw that competitors in our market were aiming to secure eight franchises per year so we set this as our year one target. The real benefit of having such clear targets is that we
were able to plan our business and anticipate such things as training and support capacity from a very early stage.

5. Set your pricing as such that you can meet your objectives

Once you know how many of your franchises are viable within the UK and you have a clear idea about what support you will provide, you will be able to calculate what you need to charge each franchisee to make a suitable profit. We set out with the objective of having a streamlined operating model with such features as fixed quarterly billing. This approach enabled us to ensure reasonable operating profit whilst charging prices that enabled our franchisees to operate profitably.

Our objective was rapid growth such that we could become a market leader before others copied elements of our concept. We wanted to secure high calibre franchisees who would require less support and who would help us to establish a market leading brand. We therefore priced our franchise at a level that would attract a wide pool of investors allowing us to be selective.

Growing you franchise business

If you have a very clear idea about your objectives at the outset, it is far easier to communicate this to prospective franchisees and to retain their goodwill and support when you hit challenges. The key to success is then the recruitment and development of an excellent team of franchisees.

This was posted in Bdaily's Members' News section by Tom Keighley .