With franchises growing in popularity, now could be the perfect time to help your business grow using this business model
Franchises are big business in the UK – around £15.1 billion’s worth to be precise. And they’re more popular now than ever with an increase in worth of 46% over the past 10 years, up 10% since 2013, according to the British Franchise Association.
The model involves handing over the running of a branch of your business to another person. It’s usually found in the restaurant industry, whereby managers run a branch of the business by themselves while following guidance from the head office.
But it can be applied to other industries and has been successful in the car selling industry, estate agents, recruitment firms and more.
So what do you need to know about making your business a franchise?
Be sure you’re ready
The first step starts with you. Franchising is a great way to quickly expand and spread a successful business model. It’s not a way to off load badly performing branches. Your business model should be sound and easily transferable to various and differing locations.
Set up a model
It’s always a good idea to have a single branch as your model branch. This can be shown to people interested in franchising your business. It should reflect the core values you want them to retain when setting up their own branch.
Lay out the terms
While you’ll be handing over the day-to-day running of the branch, you’ll want it to be part of the chain and follow the same business model. This involves setting out some ground rules on things like employee rights, branding, training, any restrictions etc. You’ll also need to make it clear what franchising fees they will be paying.
Make it easy
Ideally, you should be handing over a branch that is up and running with a well-managed system in place. When you’re franchising part of your firm, you should have in place a summary of the various systems involved including how it operates, stock requirements, financial reporting etc.
Bring in the right people
Make sure you vet anyone you’re thinking of handing over part of your business to. This involves checks on their past experience, credit rating and more. Be thorough – a bad manager can damage your brand name in certain areas and make it harder for future franchise holders to make a success of it.
Give them support
Don’t just leave them be when they’re up and running – keep in touch and offer support and advice. Ask to see the financials on a regular basis. But don’t try and micromanage them – that misses the point of a franchise system. After a while, you should be able to step away from the various branches.