FRANCHISE ADVICE
land you and your business in hot water. The British Franchise Association (bfa) has a code of ethics, which if followed could protect you and your franchisees.
Existing or proposed business – is the existing business (or business idea) the model that is best suited to franchising, or are you looking to modify that model and have that as the business that you will offer as a franchise opportunity moving forward? A franchise consultant’s knowledge can add considerably to this process.
The pilot franchise – the reason that franchises have a greater degree of success over stand-alone start-up businesses is typically because of the initial foundation or pilot franchise operation; it puts theory into practice and demonstrates the capability for a business to scale up.
The franchise offering – as with any business proposition, the franchise offering, or franchise package, should clearly defi ne the key elements of the franchise and the deliverables. Again, an experienced franchise consultant can add signifi cantly to the original proposition, drawing on experiences from a plethora of different sectors and franchise operations.
Knowledge and expertise – often SME business owners have a wealth of knowledge and experience, but this is seldom documented in such a way that it is useful when developing the franchise operation. A qualifi ed franchise expert would be able to extract and provide this information for the franchisees. This wealth of knowledge and experience can be signifi cant, particularly if a business has operated for many years. Of course, this forms part of the intellectual property of the company.
Appointing franchisees – a professional franchise consultant can help to guide clients on how to successfully select franchisees. The process is different to that of appointing employees, mainly because of the knowledge, expertise and intellectual property rights that you will be entrusting to the franchisee, and so franchise specialists can share insights on this important process.
Managing and developing a franchise network – a good consultant will explain the pros and cons to the business owner; franchising a business is not a cure-all for problems and issues that exist in a company, in fact, it is quite the opposite. As a franchisor, you are in effect starting another business. For both to thrive and survive it pays to lean on an experienced franchise consultant to take you through the process both initially and on an ongoing basis. This can be either fi nding suitable key individuals to manage and develop the franchise or, as is sometimes the case, individuals within the company that have the potential to grow and develop with the franchise operation.
So, how do you protect yourself, your business, and, of course, your franchisees? First of all, you need to decide what your franchise will look like, and what you will give to your franchisees that they cannot readily get for themselves. Is this an owner-operator franchise, where the franchisee does the job, or a management franchise where the franchisee has employees doing the job? How big is the territory and how long is the agreement? You need to devise a franchise
package which will include a licence to operate under your business name, training, launch marketing and all the assets that the franchisee need to start their business. The sum of money you charge for the franchise must refl ect
‘‘A good
consultant will explain both the pros and cons to a business owner’’
value for the franchisee and must give them a reason for not setting up the business on their own. Secondly, you need to decide
how you will support your franchisees, the contents of the ongoing support package, and what fee you will charge for this. And, thirdly, you need to devise a prospectus and recruitment plan, as well as training programmes, and marketing plans. This work is then the basis for your legal agreement, which your consultant will help your lawyer to write. A bfa-affi liated franchise consultant will have gone through this process dozens of times, and knows exactly how to develop your franchise quickly, effi ciently, and most importantly safely. Working to the bfa code will give peace of mind not only to you but to your potential franchisee, which is vital when recruiting. Paint your own walls and there is little risk; but don’t risk your business and livelihood by trying to short circuit your franchise offering – it will only end in tears. l
RICHARD LANGRICK is franchise consultant at Ashtons Franchise Consulting, specialising in franchisee recruitment and operations manual writing
BUSINESSFRANCHISE.COM 47
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