ADVICE
franchisees using the methods you have always used?
Ahead of the pack
Build additional value into your franchise brand – Alan Wilkinson on keeping ahead of the game.
B
uilding your franchisor business can be hard work. There are many plates to keep spinning to ensure that your franchise continues to attract new franchisees, whilst maximising
potential profits and value. There are a number of key factors – in addition to the level of profits that you generate – that are critical to the continuing success of any franchise business. Things that are core to any successful, well-run franchise. Few franchisors can claim to be perfect in all of these key areas, but it is these things – in combination with your profit levels – that will ultimately determine the success and value of your business. Let’s look at a few of these key areas.
The operating system is your established, documented and protected template for all areas of the business. This is your intellectual property. It is vital that you keep your manuals updated with new or amended procedures, products, services or methodology. When did you last update your manual?
“ There is an
increasing end of well- established brands conducting a ‘health check’ of their system
The market proposition for prospective franchisees should be a proven model that attracts new franchisees. This is the lifeblood of any franchise business, both in the initial growth stages, and later on for resales. Is your franchise proposition still genuinely competitive in the end-user market? What other concepts have entered the market since you launched your franchise, and are they taking your prospective franchisees? The franchise marketing and recruitment process is a critical element of any franchise. Are you recruiting the number of new franchisees that you need? Have you updated your processes in line with new thinking and technologies, or are you still trying to recruit
”
Franchisee relationships also play a key roll in the success of a franchise business. Are your franchisees happy and productive, and do they follow your system in order to succeed? Importantly, are they advocates of you and your system? What would they say to prospective new franchisees? Having the right franchisor head-office team, with each one playing their part in the smooth running of the business, is vital. Furthermore, it can significantly affect all of the above elements of operations. Each year, the number of UK franchisors increases by around 50 to 60. New franchisors will usually take up-to-date advice from franchise professionals, conducting detailed research into their franchised and non franchised competitors in their sector. They will usually therefore be using systems and procedures based on leading research and development, and will also be making use of modern methods in their approach to franchisee recruitment and the management and monitoring of their network. If you are an established, successful franchisor, who may have been operating for many years, don’t be left behind by using outdated methods and systems. There is an increasing trend of well-established brands conducting an MOT or ‘health check’ of their system, and benchmarking what they do against key performance indicators in every aspect of their business. This can identify which areas of the business the owners should concentrate on first in order to increase sales, recruitment or profitability. All of this means of course, if and when the day comes to start thinking about exiting your business, the value and saleability of the business will be greatly enhanced The British Franchise Association Qualified Franchise Professional (QFP) qualification has now been running for a couple of years, with those first to qualify as QFP attaining their awards over 18 months ago. This growing number of franchise professionals, which include franchise solicitors, bankers and consultants have a wealth of knowledge and experience, and can help established as well as new franchisors to avoid the many pitfalls of successfully operating a franchise business. n
Alan Wilkinson is senior franchise consultant at The Franchise Development Centre
Franchisor News | 17
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