- Understand the Franchise Code of Conduct before starting a franchise
- Perfect your business model, trademark your franchise and consult franchise experts
- Pick the right locations and franchisees and always support them.
Are you the owner of an existing business? Have you ever considered taking your business to the next level with franchising? Franchising is a fantastic way to build your brand and expand your business more rapidly than you could on your own or with the help of investors.
In fact, franchising is one of the best ways to grow your business without the risk of debt or cost of equity. If you are thinking of franchising your existing business, this is the article for you. Today we look at franchising basics - everything you need to know to get started with expanding your business and reaching new milestones.
1. Understand the Franchising Code of Conduct
The first, and arguably, the most important point to hone into when it comes to franchising your business is the franchising code of conduct. For those who are unaware, the code of conduct is something that is used to regulate the actions of both franchisors and franchisees.
This code of conduct exists to make sure that prospective franchisees are properly informed of the franchising agreement before entering it. This can include regulations that the franchisee has to stick to, the elements a franchising agreement must contain (from branding, colour scheme, designs and all the way down to what kind of POS system in Sydney you have to use) and a mediation procedure for disputes. It is important that you pay close attention to the code of conduct and stay up to date with your responsibilities as a franchisor. Failing to do so may end up in you getting into trouble with the law or result in heavy penalties. Better safe than sorry!
2. Create an impressive business model
Creating an impressive business model is key when looking to franchise your business. Ideally, you will have an existing business that you are looking to bring to the next level. Having a profitable business is step one towards attracting potential franchisers along with a business model that will run smoothly and profitably for your franchisees.
3. Trademark your franchise
During the process of growing your business, it is crucial that you find ways to differentiate your business from its competitors. We advise doing some research and looking into potential copies of your service or products that may exist or arise in the future.
This is why it is highly recommended that you trademark your brand or logo to protect your franchise and the integrity of your brand. Establishing a trademark will allow others to distinguish your goods and services from another and thus, making an implied reference to the quality of your products or services.
4. Consult or hire franchise experts
Franchising isn’t a small-time business, which is why speaking to experts is important when you’re looking to expand your business in such a manner. Getting legal, accounting and business advice from experts will offer you the best framework to operate your franchise business.
Enlisting the help of franchise consultants and experts daily is a great way to get advice on what will work best for your business. Different industries require different franchising models, so ensure that you are getting the best advice by enlisting the help of professionals.
5. Be very selective with your franchisees
Being choosy when picking your franchisees is of utmost importance. Take time to consider what your ideal franchisee looks like. Where will you find them? How will you attract them? The recruitment process is especially important for your early franchisees as they will be the pioneers of your business model.
Always remember that your franchisee is someone who will be representing both you and your business, so ensuring that they are the perfect fit is essential. The ideal franchisee will share your goals and aspirations, protect and grow your brand and work towards expanding your business. Be choosy!
6. Pick the right franchise locations
You could have the best products and services in the world, but if your franchise businesses are not situated in ideal locations, you might as well close shop. Picking the right locations for your franchise is one of the most important factors that contributes to the success of your establishment. Consider what locations make the most sense for your business - ideally, you’ll want to start your first few franchises not too far off from your flagship store. This allows you to manage logistics easily and means that you can easily visit your franchises at your convenience.
7. Support your franchisees
Last but not least, we cannot stress the importance of supporting your franchisees enough. You can do this by liaising with them in person, on the phone or via video calls. This is especially important during the beginning stages of your franchise, as you will want to be kept in the loop of everything that is going on.
Do all you can to motivate and encourage your franchisees, and don’t forget to celebrate their milestones - their success is your success at the end of the day, so maintaining a positive relationship with your franchisees is key!
Franchising can be a highly rewarding and exciting project for both franchisors and franchisees. We hope that this article has given you some insight into all the factors to consider and look into when looking to franchise and grow your existing business.
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