How to prepare your business for franchising.
Here, Natalia Shvarts breaks down the ‘need to knows’ of preparing your business for franchising into just three steps!
Becoming a Franchisor is not something that happens overnight; it’s a journey and requires hard work and long-term commitment. But how do you prepare your business for franchising? If only there was a checklist…
Research, research, research
There is a lot of “stuff” out there. Franchising is a large industry supported by many professionals who chose to dedicate their time helping others achieve their dreams and goals. In the UK, there is the British Franchise Association – an association whose main goal is educate, support, and promote franchising. There are articles, books, webinars, talks, and exhibitions which offer you an opportunity to speak to experts as well as those who have successfully franchised their businesses. You’d be surprised how much information is available for free!
Finance – this may be obvious but starting to franchise is an investment and whilst franchising can be a very profitable way to expand, you will need to invest before you will start to see a return. Get quotes and be realistic about the available finance you have or what you can raise and don’t fall into the trap of thinking you can do this on the cheap – those who have tried will tell you that you’ll end up spending much more in the end if you don’t do it right from the beginning!
The Manual – one of the core elements of franchising is the ability to replicate your business without you in the equation. This means that one of the fundamental steps on this journey is to create a manual – a step by step guide on how to run your business and how to do it well. Creating a manual can take time so this is probably something that you should consider doing as early as possible.
Branding – for a franchisor your brand will be one of your main assets. The brand is at the heart of the franchising proposition, and it is important to ensure that this is adequately protected. There are a few steps to consider when it comes to branding, namely:
Step 1 – choosing the name. Just because you have been trading using a particular name, doesn’t mean that there isn’t another business on the other end of the country who is trading under the same or very similar name. There are some simple searches you can undertake including the search of company names at Companies House, a general Google search, a search across various social media channels. Why is this necessary? Because if you choose a name that someone else is already using then not only can that potentially make it harder for you in the future from competition and marketing perspective but there may also be a risk that if that other business was using the name for longer. If this is the case, they could take action against you, and if they are successful, you would have to change your name. So why invest money in developing a brand when there is a risk of a dispute?
Step 2 – get protection. Once you have chosen the name, get it registered as a trademark. Having a registered trademark essentially gives you a monopoly, so if somebody else starts using your name or a very similar name, you would be able to stop them. Of course, when it comes to registering a trademark there are eligibility criteria, and you may wish to use an expert to help you with this. There is a wide range of what can be protected from a name to logo to a strap line.
Step 3 – don’t forget about domain names! Like it or not but we live in an online world. Telephone numbers are no longer as essential as they once were. What’s far more essential is having an online presence. Make sure you have purchased all relevant domain names and reserved the social media handles.
Pilot – once you have the basics in place, there is nothing better than “trying it out”. This is often described as the pilot stage and is your opportunity to test and finetune. Piloting may also help you to further develop and establish what type of training you will need to provide to your franchisees, what your support structure may look like.
The above are just a few of the essentials but there will be other things you will need. Franchising is about expansion so you will need to consider how you want to do that – do you start more locally whilst you are still in the early stages? What happens if you receive an enquiry from someone on the other side of the country? Would you be able to support them in the same way as you are able to support a franchisee who is in the neighbouring town?
Other than the operations manual, another key document that you will need is the franchise agreement – this will be the main contractual document between you and your franchisees. It is important to get it right. There may be some other documents to consider too – like a confidentiality agreement or a deposit agreement. And again, get a professional experienced in franchising to help you with these.
Becoming a Franchisor is a journey and preparation is key to success. So don’t skip on the essential building blocks – if you get the foundations right, the rest will follow!
Our dedicated franchise team has created a thorough checklist for new franchisors, outlining the key steps that should be taken in order to run a successful franchise. For the checklist, please email email@example.com
By Natalia Shvarts