15 Franchisor Responsibilities to the Franchisee

Franchising is a powerful route for business expansion and entrepreneurship in Canada, with franchisors and franchisees playing pivotal roles in this dynamic relationship. The success of a franchise system depends significantly on the franchisor's responsibility to provide support, guidance, and resources. 

Here, we look into franchisors' essential responsibilities towards their franchisees, highlighting how these duties ensure compliance and operational efficiency and foster growth and mutual success.

1. Providing Comprehensive Training Programs

Training equips franchisees with the necessary skills and knowledge to operate their franchise successfully. The franchisor's key role is to ensure that franchisees are well-prepared to meet the brand's standards and customer expectations.

For a deeper understanding of these critical franchisor duties, this informative resource provides essential insights into the breadth of support expected from a franchisor, underscoring the significance of comprehensive training programs.

2. Offering Marketing and Advertising Support

Effective marketing strategies are vital for attracting customers and building brand loyalty. Franchisors create national and regional advertising campaigns that benefit the entire network.

3. Ensuring Operational Support

Operational support is a cornerstone of franchisors' franchise support services. This involves offering guidance on daily operations, technology use, customer service, and quality control.

4. Facilitating Network Development and Site Selection

Selecting a suitable location is critical for individuals buying a franchise or looking to start a franchise. Franchisors play a crucial role in site selection, market analysis, and lease negotiations to ensure that the chosen location offers the best possible chance for success.

5. Monitoring Compliance and Quality Control

One of the primary responsibilities of a successful franchisor is to ensure that all franchisees comply with the brand's operational standards and legal requirements. This is essential for maintaining the integrity and reputation of the brand.

6. Innovating Products and Services

Innovation is key to staying ahead in a competitive market. Franchisors' goals should include the continuous development of new products, services, and business models that meet changing consumer demands and market trends.

Understanding the advantages of franchises and the strategic importance of innovation can further be explored through insights on why becoming a franchisor presents a smart move for business expansion and sustainability, as detailed here.

7. Facilitating Financing Options

The initial investment and ongoing operational costs can be significant barriers for potential franchisees. It's part of the obligations of a franchisor to assist franchisees in securing financing through partnerships with financial institutions or offering financing options directly.

8. Building a Supportive Franchisee Network

A strong, supportive network of franchisees can significantly contribute to franchise systems' overall advantages. Creating platforms for franchisees to share insights, challenges, and best practices can lead to a more cohesive and successful franchise network.

9. Ensuring Legal and Regulatory Compliance

Staying abreast of legal and regulatory changes is crucial for franchisors and franchisees. Franchisors must ensure that their franchise agreements, operations, and business practices comply with all relevant laws and regulations to protect the franchisor and the franchisee.

10. Promoting Sustainable Business Practices

Incorporating sustainable practices and social responsibility into the franchise development process benefits the environment and community and enhances the brand's reputation and appeal to consumers.

11. Implementing Effective Communication Channels

Effective communication is the backbone of any successful franchisor-franchisee relationship. Franchisors must establish and maintain open lines of communication with their franchisees to facilitate the free flow of information, feedback, and support.

12. Cultivating Brand Reputation and Customer Loyalty

A franchisor's responsibility extends beyond the operational aspects to cultivating and maintaining a positive brand reputation and customer loyalty. This involves implementing strategies that attract and retain customers through superior service and brand values.

13. Providing Crisis Management Support and Guidance

In today's unpredictable business environment, franchisors must prepare their franchisees to handle crises effectively. This entails reactive measures and proactive planning and training to mitigate potential risks.

14. Establishing Robust Data Privacy and Security Measures

With the increasing reliance on digital technologies, the importance of data privacy and security has never been more pronounced. Franchisors are responsible for implementing and maintaining robust security measures to protect sensitive franchise and customer data against cyber threats.

15. Promoting Work-Life Balance and Mental Health Support

Acknowledging the challenges of running a franchise, franchisors should promote a culture that supports work-life balance and mental health. This improves the well-being of franchisees and their employees and contributes to a more productive and positive business environment.

Conclusion

The relationship between a franchisor and a franchisee is a partnership that requires commitment, support, and mutual respect. By fulfilling their responsibilities, franchisors can ensure the success and growth of their franchisees, which, in turn, contributes to the overall strength and expansion of the brand. This comprehensive approach to franchising, emphasizing support, innovation, and sustainability, makes the franchise model a compelling option for entrepreneurs across Canada. 

By taking on these responsibilities, franchisors contribute to a thriving business environment and set the stage for long-term success in the franchise industry.

Advance Your Business Expansion with FMS Franchise Canada's Expertise

Accelerate your enterprise's potential through the expertise of FMS Franchise Canada. 

Our dedicated team of professionals guides business owners through franchise development and expansion complexities. Focused on emerging and established brands, we offer customized strategies backed by profound industry knowledge to position your business for success in competitive markets.

Learn more about the transformative impact FMS Canada can have on your business's growth trajectory. Contact us now.

A Guide by Canadian Franchise Development Experts

As experts in franchise development, we understand that navigating the franchise industry can be a daunting task. That's why we have put together this guide to help aspiring franchisors understand the key steps involved in building a successful franchise system.

Here are important steps to consider when entering the franchise industry.

Franchise Development System

Once you have determined that your business is suitable for franchising, the next step is to franchise development. This system should include everything from the operations manual to the training program for franchisees.

The franchise system should also establish guidelines for the franchisee-franchisor relationship, including expectations and requirements for both parties. At FMS Canada, we work with clients to develop effective franchise systems that are tailored to their specific businesses.

Create a Franchise Disclosure Document

A Franchise Disclosure Document (FDD) is a legal document that outlines the details of the franchise agreement. It must be given to franchisees before they sign any agreement. The FDD must include information on the franchisor's background, financial statements, and other important details about the franchise system.

In Canada, franchisors must comply with the Franchises Act and the regulations in their respective provinces. We can help you navigate the legal requirements of franchising and assist with the creation of your FDD. Here are a few of the  main points about an FDD in Canada: 

Recruit Franchisees

The success of a franchise system depends on the quality of the franchisees. As a franchisor, you will be responsible for recruiting and selecting franchisees. You must have a process in place for evaluating and approving potential franchisees, which may include a franchise application, interview, and other selection criteria.

At FMS Canada, we assist clients in identifying and recruiting potential franchisees and help develop a process for selecting the right candidates. 

Once your franchise system is up and running, you must provide ongoing support to your franchisees. This support may include training, marketing, and ongoing operational consultation.

You should have a system in place to help franchisees with any challenges they may encounter. By providing comprehensive support, you will help ensure the success of your franchisees and the overall success of your franchise system.

Conclusion

Entering the franchise industry can be a complex and challenging process. However, by following these key steps, you can build a successful franchise system that can grow and thrive for years to come.

At FMS Canada, we have decades of experience in franchise development systems and helping businesses navigate the Canadian franchise industry. Contact us today to learn more about our franchise development services and how we can help you build a successful franchise system.

Build Wealth Through Franchising With an Emerging Brand

Franchising is a great way to own your own business by partnering with an existing company. However, hitching your wagon to a budding successful company can be a potentially smart way to create future wealth. Investing and franchising with an emerging brand may just be one of the most important aspects of building your bank from franchising. 

No matter what concept you choose, the chance of financial success can be enhanced by aligning with an advancing brand. Every major brand today started as a single store. Imagine owning a Five Guys location from the very beginning. If you’re able to get in on the action earlier then the returns can be stronger! Just take a look at the numbers. 

Sure, there might be risks associated with franchising with an emerging brand over a more established business, but if you ask us, the rewards far outweigh them! They may be less expensive to join, with much lower fees and better real estate that can be secured in new territories. 

Becoming a multi-unit owner is also the ideal end goal. If you want to build wealth as a franchisee, taking your returns and reinvesting them back into the same concept in order to open and own more locations may benefit wealth creation. 

If you are able to identify potential powerhouse businesses while they are still growing, you can get in on the ground floor of a seriously profitable franchise. 

While it’s impossible to guarantee which brands are going to take off and become successful sensations all around the world, we can help you spot a brand that’s on the rise with just these few essential questions. 

1. Who is Behind the Brand?

You can tell a lot about the future of a business by taking a look at the owner themselves. A committed leader often reflects a strong determination to be the very best in the market. If you can make sure that they are really passionate about their product, then you can guess that they will go further. A boss always needs to be all in on their business, it takes serious dedication to succeed. Find a franchise where you know you can count on the enthusiasm of the person in charge! 

2. How Fast is the ROI Expected to Be? 

When you franchise with an emerging brand, a key consideration, among many others, is often getting your money back as quickly as possible. A fast ROI can always indicate that it’s a good brand to bet on. It may seem simple, but the sooner you’re able to turn a profit, the better. This allows you to reinvest and become a multi-unit owner. This is the optimal way to build wealth and help grow the brand you’re benefiting from at the same time. 

3. Are They the Real Deal?

If there’s one thing today’s market has made clear, it’s that consumers prefer to pick a brand that they can trust. Buyers want a genuine experience, and they care about the message behind all the marketing. Power to ‘em! You can spot an emerging brand easier by looking at the identity behind the business and even why it was started. Authenticity goes a long way in any market sector. 

4. Does It Have Strong Economic Numbers? 

The numbers never lie. You want to partner with a concept that has already seen some impressive returns. The value of the existing locations should be evident and backed by strong economic units regardless of the sector it’s in. This is such an important indicator to examine when trying to find an up-and-coming business to franchise with. 

5. Is It a Trending Market?

It’s not just the brand that should be emerging, but the market itself as well. When we say trending we don’t mean some passing phase either. Find a sector that has been steadily growing over the course of a few years. See if the demand is there for the product and if it’s likely to increase based on the surrounding culture. You’re searching for a long-term trajectory of scalable growth here. 

Conclusion

The bottom line here is, to make sure to pick a winner! The United States is home to the largest franchise industry in the world. It’s no wonder why so many business-savvy self-starters are flocking to these partnership opportunities. The simple business model and proven framework of a franchise can mean you’re looking at a strong ROI. 

Many are searching for the exact right brand to be a part of and eventually achieve financial freedom. Considering the potential of any particular brand for scalable growth can be the ultimate determining factor in being able to build wealth.

Remember to consider these few important factors when asking about any potential franchise partners. They will help you to see if there is really the potential for the brand to grow and then you can get in on the ground floor. Find out who is behind the brand, how quickly can you expect the ROI, if the brand is authentic, if it boasts steady numbers, and if the market sector is trending up. 

While becoming a franchisee is certainly an easier way to make your riches than starting a brand from scratch, you still need to know exactly what to look for! Finding a way to franchise with an emerging brand can help investors potentially cultivate a lucrative standing within any industry. 

Learn more about how to find out if franchising is the right fit for your financial future by contacting our team of franchising experts today. 

FMS Franchise - Working For You, With You

Looking to develop your franchise? Maybe looking to sell your franchise? You need a franchise management system to work for you, and with you. Since 2009, FMS Franchise has created and implemented franchise distribution models for hundreds of brands.

Our in-house franchise consultants make up a 28-member team to provide all of the resources required to execute a successful franchise model. From buying to selling, from supporting to launching, FMS Franchise has you covered for every aspect of the franchise business.

The fundamental premise of Franchise Marketing Systems is franchising a business effectively and profitably without large upfront fees or high overhead for your new or existing organization.

The FMS Franchise model is one of the most cost-effective franchise development options available in the franchise industry.

With more than 200 years of combined franchise expertise, FMS will assist you in every aspect of developing and managing a successful franchise business by creating a more profitable and efficient franchise model.

The franchise industry has thrived with more opportunities over the past twenty years than ever before. Those looking to enter into franchise development, or those looking to sell their franchise business, are on the cusp of fresh possibilities and propositions.

Franchising can help you expand your business. Partner with FMS to assist you in developing, defining, and structuring your franchise to launch new locations under your brand in new markets. Franchise expansion can quickly scale your brand with independent owner operators that believe in your approach and mission.

Are you ready to turn your business idea into a franchise? Our expert consultants will assist you to grow your business. Contact us today.

4 Diverse Revenue Stream Ideas While Franchising Your Business

Revenue streams allow businesses to earn better profits from multiple sources. During franchise development, plan on building various revenue streams that ensure you have a steady cash flow instead of relying on a single revenue stream.

You need to do your homework on what the industry average is in that market segment when it comes to franchise fees, royalties, advertising funds and local advertising investments.  However, you also need to be cautious and not overburden the franchisee with these so that he makes a  solid profit and is motivated to grow the business long term.  

These fees are not something you want to change often unless something dramatic changes that make you feel like you should reconsider the fees in place to keep it fair for both parties in a franchise agreement. Keep in mind, that changing any of these fees requires considerable franchisee notification and explanation, and should not be taken lightly.

Common Franchise Revenue Streams Options

Franchise revenue streams will generate your initial and ongoing income. You can divide the fee structure and build multiple revenue streams in the franchise  process. You should consider each stream as financial support that continues to grow your business while expanding it to new geographies.

Here are some common but diverse revenue stream ideas while franchising your business:

  1. Initial Franchise Fee
  2. Royalty Fees
  3. Supply Chain Mark-Ups
  4. Advertising Fees

1. Initial Franchise Fee

One of the most common revenue streams is taking initial franchise fees from the franchisee. After signing the franchise agreement and paying the franchise fees, you will shift your rights to the franchisee and allow them to sell your products and services under your brand name.

The average initial franchise fee ranges from $20,000 to $50,000. The franchise fee is a one-time payment and most investors are aware of this when they start considering franchises to acquire.

2. Royalty Fees

Your franchisee has to pay you the royalties on a weekly, bi-weekly or monthly basis, depending on the terms of the franchise agreement. You create the general payment structure of the royalty fees, either stipulating a percentage of gross sales or charging a flat-rate fee.

Create your royalty fee payment structure after assessing the market of your industry within the franchise geography. Moreover, consider the deal value and length of term to ensure you derive ample profits through the royalty fees without making the franchise look any less attractive as an investment.

3. Supply Chain Mark-Ups

The vendors your business works with can pay you a percentage of the total amount of purchases made by your franchises. This profit is called supply chain mark-up or rebates. To set up this revenue stream, you need to disclose the vendors on Franchise Disclosure Document (FDD) and how much rebate you will receive annually.

You and the franchisee are equally responsible for the franchise’s success. Therefore, don’t partner with vendors that sell highly expensive products. You might receive a high annual rebate but the franchisee will struggle to make the payment to vendors. It’s simply better to choose vendors that supply quality products at affordable prices.

4. Advertising Fees

In the advertising fee revenue system, the franchisee must pay you a specific amount of money to promote and market the brand. The advertising fee is a set percentage of gross sales and is calculated bi-weekly or monthly. 

You should keep the advertising fee management separate from royalties and other revenue streams because it is not part of your income. The advertising funds are provided “in trust” to market the brand on different platforms.

Conclusion

Every revenue stream you plan during your franchise strategy development should ideally bring long-term value to you and the franchisee. It should also be easy to execute and should not put a financial strain on your franchisee(s). You can invest the profits coming from cost structure and revenue streams at the core of your business to provide support to your franchises to make your business more sustainable and poised for future growth.

At FMS Franchise, our franchising and marketing specialists help franchisers by streamlining the process and assisting them throughout the process. Get in touch right and start to close your first franchise deal.

5 Essential Steps Before You Franchise Your Business

Business ownership is a long, sometimes treacherous, sometimes breathtaking, journey. From the first steps of figuring out how to make your ideas come to life, to the climb of streamlining operations, to the final hike towards the most rewarding view, the journey of business or franchise ownership keeps you on your toes. 

However, once you get to the top and your business reaches new heights, you will likely want to keep reaching and wanting more. 

Enter the franchise model. Once you feel like your business journey has reached its peak, you can start to explore even new territory and raise the bar by franchising. If your business is already successful, in demand, and can be replicated by anyone, anywhere, you may have the perfect opportunity for expansion.

Before you franchise, you should know the roadmap to grow your business. When you understand the below 5 essential steps before you franchise your business, you can prepare yourself for this new business venture;

  1. Decide If Your Business is Ready to Franchise
  2. Make Some Hard Decisions
  3. Secure All the Franchising Paperwork
  4. Recruit the Right People For Your Franchise
  5. Give Support to Your Franchisees

1. Decide If Your Business is Ready to Franchise

The first step may feel like the biggest. It requires you to be honest as you evaluate your business. You will need to consider a few factors to know if your business is ready to scale.

Scalability 

The framework of your business must be solid, and your model should be both easily understood and simple to replicate. If your business has built a strong, successful presence and the demand is there, people will be likely to jump on board.

Demand

Do some market research on your industry trends before you move to the franchise model. Even if people are knocking down your doors to get their hands on your products or use your services, you need to be sure that this is consistent with the demand in the industry. 

Financial Growth

Before you franchise, take a good look at your financial statements. Not only will you need to be transparent about these numbers you provide potential franchisees, but you will also need to be transparent with franchisees (within the legal boundaries) regarding financial expectations.

2. Make Some Hard Decisions

As a business owner, you are accustomed to making tough calls to drive your business forward. When franchising, it is no different. You need to sit down and answer some important questions to determine your franchise model.

By asking yourself the hard questions before you move forward, you can choose everything from your business model to your training program materials to your financial requirements for franchisees.

3. Secure All the Franchising Paperwork

Once all the decisions are made, they need to be written and disclosed to the Franchisee. This is done through the legal documents (the Franchise Disclosure Document and the Franchise Agreement) which are binding for both you and the franchisee.  In some States within the US, you will be required to submit the Franchise Disclosure Document for registration. 

Once this is done, take a deep breath, sit back, and wait for their approval.

4. Recruit the Right People For Your Franchise

Once your Franchise Disclosure Document has received the necessary approvals for franchising, you are ready to start recruiting. Consider ways to spread the word about your new, exciting franchise opportunity. Create marketing resources, go to trade shows, and talk to your most loyal and trustworthy customers and employees.

You just may be surprised at how people respond to the chance to join your team and start their own business journey under your guidance.

5. Give Support to Your Franchisees

Remember: when your franchisees are successful, YOU are successful. You have already chosen the right training program and educational resources to onboard your team, but now is the time to make sure they work. Giving ongoing support can ensure that your franchisees have access to the resources they need to be successful.

Are you ready to start those first steps to your business franchise journey? Contact our FMS Franchise Consultants to set up a meeting and learn more about how we can support you through this exciting opportunity! Contact us today at.

Benefits of Franchising Your Business

The benefits of franchising your business can be extensive, but when it comes down to it, the key benefit is a transition from operational focus to strategic.

As an entrepreneur continues to grow their business, managing all aspects of the day-to-day business effectively quickly becomes a challenge.  Multiple locations of any enterprise involve many moving parts, all of which need to be monitored and maintained in order to sufficiently and successfully exercise a typical day of business. 

Elements such as staffing, customer service, sales and brand continuity all become more and more difficult as   Growth can lead to unsustainability if not acted on properly.  Business owners frequently wish for expansion but fear their ability to control each operational process will become muddled or lost altogether. 

And, in most cases, they are probably right.  Many times, business owners who grow through company-owned and managed locations run into obstacles that hinder growth as the business expands beyond what they can manage directly.   

It is at this crossroad in a business’ growth that franchising becomes a viable expansion option.  Franchising your business allows you to multiply a brand’s footprint, but with added manpower and capital to scale the growth.  The value of having independent business owners who have money invested and their direct, onsite focus is enormous and the performance of franchise-owned and operated businesses almost always outperforms company-owned locations of the same business model.

Franchising your business can also reflect positively to the business’ image, as the public sees this new business as locally owned and operated and if the franchise owner is the right person they are connected to the community and know how to connect to consumers in the area. 

People are naturally attracted to familiarity, and a process that is consistent regardless of the location in which it is being executed will lead to successful results.  Franchising allows a brand to grow and duplicate at several levels.  At the national or global level, all franchisees and corporate units contribute to a marketing fund that is used to promote the brand and build awareness for the company. 

At the regional level, franchisees work together through regional cooperatives where advertising dollars are spent in a region to build local awareness and leverage economies of scale in advertising and promotion spending.  At the local level, franchisees are required to spend dollars on promoting and advertising the business in their immediate market.  The combination of the advertising platforms maximizes the opportunity for brand development and makes franchising a win-win relationship between franchisor and franchisee.  

Franchising your business allows entrepreneurs to attract other like-minded people with a thirst for owning their own business, but with the desire to have guidance and support along the way. 

Many do not want to endure the time, effort and risks inherent in starting a business from the ground up.  By purchasing and joining a franchise, franchisees are able to reduce stress and increase the chances of success.  Franchising your business will naturally pool resources together – collaboration amongst franchisees leads to sharing of ideas and proper quality checking of each system and process. 

A business owner benefits from having easy access to criticism in an appropriate and relevant manner.

The entrepreneur who is able to make this transition stops focusing on the small items inherent in managing a business and begins to focus on what strategic aspects will help drive the growth of the brand and scale the business.  The funny thing about this transition is that people who are stuck in an operational mindset many times are busier and work harder than those who are strategic-minded. 

Franchising is a big picture initiative where the product becomes the business model itself and with each transaction, the brand grows exponentially. 

For more information on the benefits of Franchising Your Business, Contact us:

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Are You Ready to Franchise Your Business? 5 Questions to Ask

Franchise Your Business
Are You Ready to Franchise Your Business?

You have a business and want to expand.  There are a variety of ways to expand the number of locations, company-owned, bringing on partners, venture capital or franchising. Many businesses decide that franchising could be an extremely effective way to develop a brand and business model without the intensive capital or staffing needs of other channels. But how do you know your business is ready to franchise and how do you know when is the right time to franchise your business?

Here are some questions to ask if you’re seriously considering whether to franchise your business or not:

  1. Is your business currently successful and how do you define that success?
  2. Why is your business successful?
  3. Can you afford to franchise?
  4. Can you sell your franchise business concept to entrepreneurs?
  5. Are you ready to provide the systems to franchise owners for long-term success?

1. Is your business currently successful and how do you define that success?

If you want to entice entrepreneurs to invest in your brand, it must have a track record of solid revenue growth, dependable profit margins, and a strong customer/client base. Your business may be ready to franchise if the business has credibility based on current success.

2. Why is your business successful?

Can that success be achieved in other locations in volume? The success must be due to factors that can be replicated and easily taught to others.

For example, if your successful concept is based on a service that’s in high demand and isn’t widely available, your business may be ready to franchise if prospective owners can learn how to run your business model.

But if the reason your business is successful is due to being located in one hot market or having unique skills that make you best suited for success, you may not be able to replicate that success.

3. Can you afford to franchise?

You may be ready to franchise your business if you have the capital to put the necessary franchise infrastructure in place. You’ll need to hire attorneys to provide legal support and all the necessary documentation. You’ll need to set up training, operations, and marketing systems. You’ll need to cover the cost of state registration fees.

You may hire franchise consultants. The cost to the franchise can range from $15,000 to $100,00 depending on the business.

4. Can you sell your franchise business concept to entrepreneurs?

How will you convince anyone to spend the money necessary to open a location for your brand?

You’ll need to market your business to prospective owners and sell them your concept. You may be ready to franchise if you can make the argument that between the franchise systems you’ve put into place and the prospect of customer/client demand and revenue, your business will be a success for anyone willing to take a risk.

5. Are you ready to provide the systems to franchise owners for long-term success?

If you’re ready to franchise your business, your franchise plan must include systems for training, operations, administration, and marketing. If your business requires equipment, you need to find ways to minimize those hard costs for owners.

You may need to offer assistance with lease agreements or attain the most desired locations. Your business needs to be turnkey for every franchise owner. You may be ready to franchise your business if you have a solid plan for franchise owner support.

For more information on when you should franchise your business, contact us for a free franchise consultation.

How to Franchise Your Business Well

Why is it that some franchises seem to expand so quickly and others can’t seem to get off the ground?  In the franchise development world, you have the opportunity to see some “out of this world” ideas and business concepts.  The really exciting part of working in franchising is that we are able to work closely with entrepreneurs who have more vision, insight and ability to innovate than anyone on the planet.

We are confident that what drives the global economy is the small business owner and entrepreneur who is looking for ways to create, constantly looking for ways to build and always taking a positive spin on how to approach opportunities.  Franchising is a nice way to keep your finger on the pulse of the global small business economy and to see what, who and how people are doing business. 

In most cases, what happens in the small business and franchise markets is what is coming to the broader market.  On one hand, the franchise market has produced a multitude of amazing success stories, but why do some not scale as efficiently and achieve duplication of their brand through franchising?

When you franchise a business, you enter a new world of business, some business leaders just aren’t great at being a coach.
Just because an entrepreneur makes a fantastic product and excellent pizza, doesn’t necessarily mean they have the business skill set needed to teach, coach or mentor others. 

Franchising is a business where the franchisee invests in the business because they need advice, guidance and counselling from the franchisor.  A Franchisor needs to be able to share and teach intellectual property to new franchisees and sometimes the entrepreneur can hold back the growth of the company if they are unable to communicate effectively to teach, train and sell the vision of the franchise model. 

Our direction to a business that is just starting to Franchise the Business model, do a hard self-evaluation, if you don’t have the skill set to do this, there are lots of professionals out there you can bring into your system to support your growth and be a leader within your franchise business.

Franchise Development is a Serious marketing and sales business

There are cases in franchise development where “Build it and they will come” holds true, but the majority of the time, it takes a concentrated effort to market, promote and sell the franchise.  When you franchise your business, you now are tasked with the responsibility of sharing your vision and convincing other people that what you have to offer is worth the investment and offers value to them overdoing it on their own.

Franchise development is unique in that you are effectively selling “air” when you promote your franchise brand.  This transition from selling a physical good, product or item to now selling an idea requires a good marketing plan, franchise sales process and resources to support these marketing efforts.

Typically, this requires the involvement of franchise brokers or professional franchise salespeople who can assist the new franchise in going to market.  The franchise systems that have success in franchising invest the time, money, and effort into franchise collateral materials, promotional tools and overall branding.

The great franchise systems certainly have a look, feel and presentation that resonates with a potential investor and looks bigger than a “mom and pop”.

You Should have a Great Concept when you Franchise your Business

Good ideas are never easy to come by, but when you do find one, the process of franchising allows a business owner to leverage that idea and monetize the concept through growth and duplication into new markets. 

Some markets are just tough to the franchise when it comes down to it.  If you have a QSR foodservice model and are considering franchise expansion, you better have a strong differentiator to be able to attract attention and draw interest from other foodservice franchise brands.  In some cases, established and mature markets can be franchised with a good concept and a unique approach to the model.

OrangeTheory is a great example of this idea, it started with a new approach to fitness and health services using the group fitness model and what started out as the “Ellen Latham” fitness program used innovative technology and system to help clients measure their heart rate as they went through the fitness program.

With partners, the business rebranded to OrangeTheory and in only 6 years was able to expand to over 1,000 locations worldwide.  Fitness is a crowded and competitive market which makes this growth even more incredible, but what has helped drive the expansion is a great concept, something innovative and different from what had been done in the past.

The branding and overall look, feel and presentation are what have helped carry the model forward and in an essence have been the vehicle to support new franchisees' willingness to invest in the model.  Ultimately, if you are going to franchise your business, you should have something innovative and something that will create interest and ultimately spark the investment in your brand and franchise model.

Good Numbers are the Heart of a Good Franchise

It only makes sense that when you franchise your business, you are ultimately selling an investment opportunity.  If the numbers and return on investment exceed expectations for franchise investors, odds are that the model will continue to sell and grow. 

The Creamistry Franchise model is a good example of this which is a new brand in the ice cream and frozen dessert market segment that has in a way redefined the market niche.  The model incorporates liquid nitrogen to freeze the ice cream product and at the unit, the level has produced significant revenues and profitability for early adopter franchisees.

Impressive financials have been part of the presentation for Creamistry and the response has been nothing short of miraculous with over 200 units sold in the first three years of franchise development. 

Fortunately, franchisees have been able to generate similar numbers in their units and continue to validate the brand and financials which in turn only drives more unit growth.  What Creamistry has realized, much like other brands is that when the model works and financials exceed the norm for an industry, multi-unit and master franchise growth becomes a reality. 

Multi-unit franchisees are capable investors who have the capital to invest in 2 or more locations at one time.  In some cases, they will invest in large numbers of units at one time exceeding 50 units over a defined time period.

For more information on how to decide whether to franchise your business and when is the right time to franchise, contact us for a no-obligation consultation to review the model.

Franchise My Business with the Right Sales Process

Step 1: Franchise Outreach/Lead Generation

Franchise lead generation and marketing will fill your franchise sales funnel and be the first interaction with a potential franchise buyer.  Potential lead portals for franchise lead generation:

·         www.FranchiseConduit.com

·         www.Franchiseopportunities.com

·         www.Franchisegator.com

·         www.TheFranchiseCourier.com

·         www.FranchiseDirect.com

 

Organic leads can be generated through franchise referral programs, Franchise SEO, Franchise Public Relations and other mediums. 

Franchise Tradeshows can be an effective way to generate leads and meet potential franchise candidates in addition to other marketing channels.

Step 2:  Franchise Contact and First Presentation

Franchise leads should be greeted with an automated response promoting the model, the franchise value proposition and the overall concept so they are enticed to have additional discussions with the franchise team.  Franchise sales calls should be made within 60 minutes of the lead being submitted for best results.  We typically recommend that a text message should be sent as well. We then have additional introduction emails which should be crafted to your brand and franchise model, but ask key questions:

·         Why are you interested in the franchise?

·         What Time Frame would you like to open the Franchise?

·         Qualify the Franchise Candidate.

·         Present the next step in the sales process.

Step 3:  Franchise Presentation Call

During this call, you should explain the sales process and the defined steps in the process before they would execute a franchise agreement.

1.       Introduction and explain the team behind the franchise.

2.       Define the process and qualifications needed to be awarded a franchise.

3.       Ask the buyer to speak openly with you and share their story. 

4.       What is the timeframe for this decision?

5.       Confirm that the franchise process is clear and understood. 

Step 4:  Franchise Buyer Approval / Disclosure

Once the candidate has submitted their completed Franchise Request For Consideration form, it is reviewed and approval is granted to move forward in the process.  We review with candidate what to expect upon receiving the Franchise Disclosure Document.  We recommend sending a hard copy of the FDD sent via FedEx and electronically via DocuSign.  We then like to schedule a call to review the FDD with the candidate and go through the document in detail. Following the candidate being disclosed, validation and communication with existing franchisees is encouraged and recommended.

 

            Disclosure:  Current registered FDD document is sent to candidate.  Unaudited financial statements must be current within 90 days.  In registration states, the revised agreement must be renewed with every registration state every year.  The following are registration states: CA, FL, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, TX, VI, WA, WI. (https://www.fmsfranchise.com/blog/franchise-state-registrations/)

Step 5:  Franchise Discovery Day

Once a candidate has been disclosed and had the opportunity to thoroughly review the Franchise Disclosure Document, an invitation to attend a Discovery Day is extended.  The Discovery Day is the ultimate franchise sales opportunity, it is where you show off the business, let them see the business in action and get to know everyone involved in the business model.  If the discussions take you there, you can ask for the close at the Discovery Day. 

Step 6:  Follow up for the Close

Constant follow up is given throughout the entire process, the closing process is no different.  Following Discovery Day, most often the candidate has additional questions regarding the information they were provided during their visit.  The final commitment to move forward and become a franchisee is requested and confirmed.

Step 7:  Award Franchise

Now that the decision has been made to become a franchisee, Franchise Agreements and all supporting documents are signed, notarized and submitted to the corporate office along with payment of the initial franchise fee. Training is scheduled and the countdown to Grand Opening begins for the approved franchisee.

 

For more information on How to Franchise Your Business, contact us: https://www.fmsfranchise.com/about-franchising/contact/