Business Franchising & Tips for Franchisors
What is a Franchise?
In my last article about business franchising you get to know all about the noticeable idiosyncrasies that are very much required for understanding the franchise business and I also tried to give some tips to those entrepreneurs who have a wish to own a franchise. While last time all concentration was for young entrepreneurs, this time I am going to write for all you big-honchos sitting out there thinking to franchise your business. Therefore the first question that should strike you in your decision to franchise your business is whether or not your business concept is franchisable as if you are seriously considering to franchise your business then by undertaking this analysis you will be able to make apt franchise strategies.
If you will simply go to determine the franchisability of any business concept then for sure that can be almost impossible for you as franchising competency of any business can only be accessed after performing significant amount of analysis as per the different criteria proposed by franchise experts. Some of the noticeable criteria most of franchise experts use to assess the readiness of a company for franchising are explained below so that you can analyse likelihood of being successful as a franchisor.
A. For selling franchises firstly a company must be credible in the eyes of its potential franchisees. Different measures that are analyzed before finding the credibility in any company are large organization size, years in operation, number of outlets, strength of management and so forth. Therefore firstly you need to check out where your company exists on such grounds and only then you can think for franchising of your business.
B. After credibility you need to make sure that your franchise organization is competently differentiated from the other franchised competitors who are present in the market. And for assuring this you can come with ideas like differentiated or individualized products/services, exclusively unique marketing strategies, reduced investment cost, or planning for different target markets.
C. The next important thing to secure here is transferability of knowledge as with the help of this you can teach systems to others because to franchise you need to be able to properly educate your prospective franchisees and that too in a real short period of time in the most effective manner.
D. When you are planning for franchising of your business next important thing is to check adaptability of your business concept in the wider perspective as some concepts cannot adapt well over the large geographic areas due to the territorial variations in the tastes and preferences of consumers.
E. As prototypes offer one of the most effective testing mechanism you also need to assure that you are having a refined and effective prototype operations. Such prototypes will help you in demonstrating that your working system is verified and they also play an effective instrumental role in the training of the franchisees. With the help of prototypes you will be able to get a testing ground for your marketing strategies, new services or products, merchandising or any sort of new initiation you want to involve in your business operations.
F. Working as per a proper system is greatly important for the success of any business and for making your business franchisable you need to have a documented system as with the help of that you will be able to communicate more properly to your franchisees.
G. You also need to pay proper attention of the affordability of your business for making it to be franchisable as affordability shows a prospective franchisee's capacity to pay for the franchise he wants to own. By making your business affordable for franchisees you will let them to accept you as their franchisor as that cost will be actual cost of owning your franchise.
H. After ensuring all the over mentioned criterion you need to be ready for real acid test and that comes in the form of ensuring the return on investments as a franchised business must be hugely profitable. The franchised business concepts have to allow enough lucrative profits so that the franchisees can get adequate amount of return on their investment after the royalty and hence can constructively stay loyal to your business idea.
I. Now comes the turn of market trends and conditions as they play one of the most significant roles in the lucrative execution of any business idea. Generally we think that market trends and conditions are not the real indicator of franchisability but they are one of the most important aspects for the success of any business concept and therefore they are keys to the long term planning. How the business will behave in future? Will the market be growing or consolidating? How the different changing trends will have an impact on your business? How can in the time of cut throat competition you can assure profit and success of your franchisees and so forth are the question that can only be answered out by aptly analyzing the market trends.
J. Your plan of franchising your business can be just a low cost means of expanding your business but that does not mean a no-cost affair because as a franchisor you need to have the capital and resources so that you can competently implement your franchise program. Resources will be needed for initial implementation of your franchise program and that will vary as per the scope of expansion plan. You will need capital and resources for aggressive expansion or legal documentation or for many such sorts of stuff and therefore you have to have a proper capital and resource management program inculcated in your business system.
How Franchising Works: An illustrated guide
K. As now we are approaching towards the end of this discussion more important points that belong to the emotional intelligence of business handling are needed to be mentioned here and one of that is having a commitment to relationships. For being a successful franchisor you need to focus on building long-term relationships with your franchisees as that will be mutually rewarding for you both. You should understand the importance of link that exists in between relationships and profits and therefore you need to include a mechanism through which relationship with franchisee can be maintained. By having strong franchisee relationship you will be enabled to sell the franchises in more effective manner and you will also be able to introduce needed changes quite smoothly. You can quite conveniently and constructively motivate franchisees and their manager towards a consistent level of services that will lucratively increase the reputation and profits of you and your franchisor too.
L. Finally we have reached at last step of being a successful franchisor and that tells you about the importance of strengthening of management. Strength of management is the single most important aspect for the guaranteed success of any franchise program and for that you need to include different experts of who have expertise in the areas like franchise marketing, franchise sales, lead handling, ad fund managements and so many more. This will help in the effective administration of your business franchise and hence will let you celebrate your success in the most constructively productive manner.
© 2015 Shivendra Tiwari