Franchising is an excellent way to expand your business and increase the visibility for your brand. With very little investment, you can set up stores or business establishments in several different locations. However, it’s not a completely risk-free venture.
Yes, you do minimize your loss and risk thanks to lower investment, but you need to choose your franchisees carefully. At The Franchise Institute, we always encourage people to consider franchising their business carefully and help them avoid common mistakes. Here’s a list of things to avoid when franchising a business.
There are many people who believe that they can start a franchise almost immediately after they start a business. They’re so eager to earn revenue that they’ll rush things and that can have negative consequences for the franchisor as well the franchisee. It’s important to allow your brand to establish itself and gain some traction because that’s the real value of the franchise.
You need to create a trustworthy brand with a good reputation and customer base before you start franchising it. If you don’t take this essential step, your franchise won’t be as profitable as it can be, and that would have an impact on your overall reputation.
When you sell a franchise, you don’t just wash your hands off of it and hand the responsibility to someone else. One of the biggest advantages of a franchise is that it allows you considerable amount of control over how your brand is used and marketed.
You can also control some of the internal operations of the branches to ensure your reputation and quality is preserved. However, you can only do this if you have a set system in place. You need to provide everything from training to support to the branches so you need to ensure your business is ready to handle it.
The last thing you want is for a franchisee to skip training because that means they’re more likely to make mistakes and compromise your brand. You should always remember that your brand and quality of service is your biggest asset; so if one franchise doesn’t deliver good products and services, it can have an impact on all branches and you want to avoid that.
Some franchisors compromise on the franchise locations as well as how their brand and trademarks are used. That’s something you shouldn’t budge on because they have an impact on your brand, reputation, and the success of your venture. For example, you shouldn’t allow a franchisor to set up a branch too close to an existing branch because you want to make sure they don’t harm each other’s business.
Most franchisors will give buyers operation-authority over a designated area. In rural locations, this area is usually large and serves a bigger audience. In urban locations, they can be just a few kilometres apart. Your franchisees should gain enough profit to sustain themselves and earn comfortable revenue.
When you give someone the right to run a business under your branding and company name, you need to make sure they’re trustworthy and competent. You shouldn’t forgo looking into their qualifications, experience, or their overall enthusiasm for the venture. You should evaluate the potential franchisee personally to ensure they’re fit to do your brand justice.
If you want to know more about franchising or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435or 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