04 Oct Things You Need to Do Before Franchising
If you are planning to tread the franchise route, it’s probably one of the best ways to expand your business’ reach. Australia has almost 2000 franchise systems. But if you speak with any successful franchisor, they will tell you there is a significant amount of work to do before you start raking in the dollars.
In the initial stages, it’s best to consider whether you want to open up another branch and manage it yourself, or want to bring in franchisees to fund your expansion plans. Before you set off down this track of franchising your business, you need to assess a number of things and take various factors into consideration in order to decide whether franchising is the suitable growth mechanism for your business. To franchise your business successfully, you need to have some things in place. Here are the things you need to do before franchising:
These are essentially the proven process that you sell; and which encourage franchisees to buy into your business rather than go ahead and set it up themselves. It’s important that every aspect of your business be systemised and this includes everything ranging from your suppliers and production to workplace health & safety to employment practices; in fact you also need to have proper systems for visual merchandising and marketing. If you want your business to operate in the same way in every location, your franchisees need to follow certain set systems.
#2 Brand story
Your business also needs to have a brand story that is easily recognisable and appeals to your target audience. It needs to be something that people are drawn to; it needs to provide a great customer experience and incorporate your values as well. In the long term, franchisees will buy into this brand presence. The fact is that franchisees want to be associated with brands, recognisable product names and a logo. But you would have to trademark all these things in order to protect your IP.
#3 Company store
Every franchisor needs to have at least one main company store that’s under their control; and it’s where you can demonstrate your business model, the manner in which it looks and operates and how profitable it is. This is your flagship store; it’s where you demonstrate your system and new franchisees will attend training sessions etc.
#4 Operational support from experienced franchisees
You would also need a team that would handle the training aspects of a franchise system. Not only will they help with training new entrants, but will work on developing these training systems as well. After all, you can’t be at multiple places all at once. At the outset, you become the single point of contact for all new franchisees. But once they are trained and settled in their own businesses and have a solid understanding of the business, they should be able to support new franchisees.
#5 Knowledge about franchising
There is a Franchise Code of Conduct that the ACCC (Australian Competition and Consumer Commission) that governs this industry; and you are required to operate under its rules and regulations. While there are a number of documents and paperwork involved; at the very least you are required to have at least an information statement, a franchisee agreement as well as a disclosure statement that is in line with the code of conduct. This is why you need to have a team of expert professionals that understand how the franchising process works and can provide you advice on how you can set up your franchise.
While a lot of hard work is involved in setting up a franchise, and you need all of the above to set up on, you also need to have the enthusiasm, energy and passion to make your business successful. 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