When organizations make the decision to expand through franchise development, there are many key points involved in making the transition effectively. Having spent years in the field of franchise development work, one of the great sayings that rings true so often is, "Don't Put the Cart Before the Horse."
The first issue is to develop a concrete plan that takes into account all of the business elements involved in running not only your own business, but also the franchise system. Companies don't plan to fail, they fail to plan. Franchising is the business of leverage - so when things go wrong, they have the potential to be catastrophic. The first step is to identify whether franchising is indeed the optimal expansion method. Certain businesses make great franchise opportunities, most do not. There are professionals and franchise consultants who provide this advice and guidance at no cost to you, use them.
Once the decision has been made that franchise growth is the most efficient and effective model for business expansion, it then is time to begin developing the model. Define the business model that will be replicated through franchising first, if your business has multiple moving parts and many complex operational peices, it probably would make sense to only franchise a portion of that operation, define this. After identifying the concept, the franchise business plan should start with a thorough research study of the competing franchise systems. This should encompass all franchises that may be compared to your model based on investment, industry, business type and market growth. Other's mistakes and successes can be used to map your franchise growth.
In building the franchise business plan, it is essential to work with someone or an entity that brings experience in the field of franchising. Although I recommend working with a good franchise attorney, you should first have a business consultant help you develop the franchise business plan and then work with the attorney to document the UFDD and necessary legal documentation. A franchise model should have a well defined territory model, a well defined franchise fee, structured royalty, solid training programs and a great support program for franchisees.
Franchising can be a very effective way to expand a good business, but it is essential to plan accordingly in order to achieve impressive growth.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.