When a business becomes lucrative and successful, its owners sometimes decide to franchise it so that others can enjoy the same benefits of a sound model. While taking this step can work out well for some companies, for others, trying to franchise can sink their business.
Many professional coaches have experience working with clients who decide to franchise their businesses, and they understand the many opportunities and potential pitfalls. Here, 10 members of Forbes Coaches Council share the No. 1 tips they have for business owners who are looking to franchise.
Forbes Coaches Council members share tips for business owners who are looking to franchise.
Photos courtesy of the individual members.1. Ensure The Franchise Has A Clear Differentiator
Ensure the franchise has a clear and strategic differentiating concept with a compelling growth and profit generation model. Make sure its strategic value proposition, operational systems and processes, brand promise and customer value and experiences are clearly aligned with its growth roadmap, vision and purpose, yet sustainable and innovative enough to support the changing landscape, challenges and model. - Dennis Foo, Pu Xin ASPIRA Advisory Limited - Shanghai | Hong Kong
2. Make Sure You Have A Proven Concept
Make sure you have a proven concept, sound numbers and a strong contingency plan to address anything that arises, such as a pandemic. So many franchises went under in the past two years (across several industries) due to an unforeseen lack of planning. Numbers are great and essential, but knowing what’s around the corner is greater. - Joshua Miller, Joshua Miller Executive Coaching
3. Meet With A Franchise Consultant
The first step is to understand whether franchising is right for your business. There are franchise consultants who can advise on whether your business structure and finances are appropriate for franchising. - Luke Feldmeier, Online Leadership Training - Career and Leadership Accelerator for Engineers
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4. Have Replicable Systemic Structures
Franchising is an interesting option to pursue when there is a positive brand association and a level of awareness of what the business stands for. My No. 1 tip is to have replicable systemic structures that will ensure the standards of operations and delivery are consistent with the brand promise. A franchise becomes successful when the customer experience across the board is consistent. - Thomas Lim, Singapore Public Service, SportSG
5. Be Clear On The Structure Of Licensing Agreements
Be very clear on how your licensing agreements need to be structured across locations and geographies. Elaborate in detail about what your responsibilities are to the franchisees. And be very clear on the franchisee criteria for onboarding. These are a few areas that, when misunderstood, cause franchises to fall apart. - Arthi Rabikrisson, Prerna Advisory
6. Consider All Pros And Cons Carefully
First, do your research. Decide if franchising is the right move for your business. Consider all the pros and cons carefully before making a decision. Then, choose a franchise model that will work for you and your business. There are many different franchise models out there, so make sure you pick one that makes sense for you. - Peter Boolkah, The Transition Guy
7. Ensure The Business Can Run Without You
The first question to ask yourself when franchising your business is, “Could my business run without me?” Are your policies, procedures and operations so well-documented that the business can succeed without you? This is how you know that you have a solid enough model for franchising. Creating a successful business is one thing. Creating a business that can be replicated by others is another. - Krista Neher, Boot Camp Digital
8. Have Well-Documented SOPs
Well-documented standard operating procedures are incredibly important when a business owner is looking to franchise. Clear brand standards, effective lines of communication, training and structure will increase the likelihood of success within the new branches and also protect the brand. - Lindsay Miller, Reverie Organizational Development Specialists
9. Ask Yourself Five Questions First
A franchise is not always the most relevant solution for every business. It is not enough that the concept works once. This success must be repeatable. Ask yourself the following five questions before embarking on the adventure of franchising: Is the concept unique? Is the know-how transferable? Is the brand protected? Are the elements of the concept duplicable? Is the pilot profitable? - Andre Shojaie, City of Montreal
10. Consider Expanding Geographically
In the pro-services space, I would say, “Don’t do it.” I’ve seen numerous businesses try this and fail. Along the way, they’ve lost money, energy, momentum and the confidence of their people. There are so many better alternatives. Most highly successful service firms can expand geographically by opening new offices where they are in control. - Randy Shattuck, The Shattuck Group
