Trust is a basic aspect of any franchise relationship; if you want to grow your business and widen your brand’s market reach, you need to work hard to gain the confidence of prospective franchisees.
Here are some things a franchisor can do to gain the trust of franchisees:
Franchisees have to be profitable. When they choose to invest their money and efforts into your franchising network, they need the assurance that they will get a good return on investment. They should also be profitable enough to reinvest in their business, buy more franchises within the network and have some money for refurbishments too.
As a franchisor, you need to be able to demonstrate this to your potential franchisees and be upfront, honest and transparent in your business dealings with them. Be forthcoming with the model and data used in projecting short-term and long-term profitability and cashflows. This information is very important because it’s one of the very first things banking and financial institutions ask when franchisees seek funding.
Potential franchisees need to be able to meet other franchisees. The latter’s opinion of the business and branding will carry substantial weight. There will be some people that complain about the way the business is run. However, if you run a credible business, there will also be many franchisees that only have good things to say about you. This helps prospective franchisees gain an objective view of the network and they are able to make a more informed decision.
You pay royalties for a reason. The purchasers need to believe in your brand and should be confident that it will grow in the future. This is one of the things that can attract people in a big way, at the outset. If your potential franchisees are attracted to the brand and what it stands for, they will be eager to jump on the bandwagon. This is why you as the franchisor need to protect your brand image and work towards expanding its reach in the market.
For many people, this may be their first foray into the world of franchising. And when they are still finding their footing in the business, they need the assurance that they will get very good support from their franchisor. This is critical in the case of people that haven’t been in this industry before. They look for support and training in the first few months of their entry into your fold. The minute they know that you will provide them that support and in the future as well, they will have greater confidence in you. This has a significant impact on franchisee satisfaction in the short to medium-term.
This proves that your business model is viable and lucrative. While you can set up your brand in various A-grade locations, it’s crucial that you test the model in B-grade sites or strip sites too. This matters because your franchisees may consider opening up stores in these areas. You need to know whether or not they would be able to make a success of in these locations too.
If you want to know anything more about setting up a franchise business or want some sound and professional advice, call The Franchise Institute on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435