Franchising your business
With the economy still struggling, business owners are looking very closely at the strengths and weaknesses of their businesses. It is also a time where many owners may start to consider franchising as a model for expansion, as not only can it hugely strengthen the brand and short-term reach of a company; it can also be a very good method of securing its future – but only if done well.
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 their business under the contract, conditions and proven format that have been 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 franchisees!
The formation of the British Franchise Association (bfa) in 1977 marked a significant leap forward for franchising and its approach helped provide a professional, ethical and subsequently very successful industry. Set up to accredit and promote excellence in the sector, the bfa has strict membership criteria for 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. This means that businesses looking to franchise have some guidelines and standards to which they can work – giving them a better chance of success, and prospective franchisees a better opportunity for themselves.
To franchise a business is not something that can be done without serious thought and time. There are three key elements to begin with:
- The business needs to be proven – it actually needs to have happened – not just the idea on paper or in your head. You need to show potential franchisees that the business works in the way in which they will need to run it.
- It needs to be transferable, which means it can be run in multiple locations, using the same system, brand and quality.
- And it needs to be teachable, something that you can train others to do; there is little point having a franchise that only three people in the world would be capable of running.
If your business passes these three simple, but vital, checks, then you can start to look at what you need to do in order to turn it into a franchise. Next time we’ll look at exactly what steps you need to consider to do just that.
This was posted in Bdaily's Members' News section by Paul Stafford .
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