Many business owners think that if they have a successful independent company, that to grow it, all they need to do is find franchisees who are equally passionate about their product or service.
Unfortunately, it’s not that simple, and the question becomes, what do franchisors of emerging brands need to know about the brand strategy of building a successful franchise? Scaling a business into a successful franchise is an uphill climb — much like trying to summit Mount Everest — and too many entrepreneurs and business people start the journey without being fully prepared.
Here are three mistakes to avoid if you would like to franchise your business or are about to franchise your business.
1) Waiting Too Long to Get Help with the Franchising Process
New franchisors are often surprised to learn that running a franchise system is different than running a solo business (e.g., salon, restaurant, fitness center, etc.). As a franchisor, you are not performing the day-to-day activities at a single location. Instead, you have new responsibilities, including recruiting and training new franchisees to grow your brand. For these reasons, transitioning into a franchisor role can be difficult for business owners.
Too often, new franchisors relate to franchising as a growth strategy rather than a business in and of itself. They may be excellent at running the operations of their core business but never acquire the skills necessary to become a successful franchisor.
Many entrepreneurs may not have the leadership skills required to be a franchisor and start to doubt themselves. They begin to seek advice and listen to people who aren’t authorities in the area and waste time and money doing the wrong things.
Too often, entrepreneurs who are looking to grow their company wind up in a “franchise factory” situation. They hire consultants who toss out template “cookie-cutter” documents and prototypes, much of which is irrelevant; they need to take a step back and evaluate the situation carefully (look at their background, talk to their clients, etc.).
That is why new franchisors must have a clear understanding of what it means to franchise a business.
If you are interested in setting foot in the franchise space, take your time; be diligent about researching the franchise model and talk to people that have successfully franchised a business. Also, it’s crucial to develop a relationship with knowledgeable professionals (e.g., attorneys, consultants, and accountants) who can help you steadily transition from a business owner to a franchisor.
2) Not Vetting and Choosing the Right Franchisees
Hiring people should be done critically by matching their skill set, as they will be representing the company’s core values. Franchisors should make an effort to find franchisees who are the right candidates. The right candidates are people interested and willing to invest money and time in becoming a franchise. The opinion, experiences, and efforts of a qualified franchisee add to the franchise company’s growth.
The enticement of start-up fees and new locations tempts franchisors to lower standards for new franchisees and not devote enough attention to training — this oversight results in franchisees who don’t fit in with the company culture, are hard to work with and represent the brand poorly.
Franchisors should look at their target markets and develop a profile of their desired franchisees, focusing on education, experience, motivation, cooperation, financial, and other qualities, and stick to that profile in recruiting and evaluating potential transferees of franchised units. So, what does a successful franchise owner look like? The top traits include:
- Leader and communicator
- Willingness to learn
- Team player
- Financial aptitude
- Results driven
A substantial investment in background checking, getting to know potential franchisees, and providing in-depth training to new franchisees in the franchise system’s business objective, brand strategy, marketing strategies, marketing objectives, goals, and operations, will improve the likelihood for success. These conversations reveal a lot about candidates and what they’re looking for.
Everything is more straightforward and runs smoother with the right franchisees who understand the brand identity and branding strategy of the franchise. They are the top supporters and become ambassadors of the brand. The number one driver of franchise growth is happy, profitable franchisees — people have to be the right fit. . If the franchisees are unhappy and not making money, it becomes impossible to attract additional talented franchisees.
3) Not Taking an Active Role in Franchisee Recruitment
Franchisors should take an active role in planning out the growth of their franchise system. Just hoping that the perfect franchisee will come along isn’t enough. In other words, an “if we build it, they will come” mentality doesn’t work.
Being proactive about the growth of the company and the brand means making plans and processes as detailed as possible. Franchisors need to take the time to really think about what each person brings to the table, keeping in mind not every potential franchisee is a good fit! They need to evaluate whether he or she will help build a robust franchise system and whether a proposed location fits into the larger business strategy.
Emerging franchisors need to make sure they are able to walk people through their processes. Hiring someone to coach/teach you how to vet candidates and look for red flags is hugely advantageous (e.g., When do you show the FDD? How do you run a discovery day?).
Find a coach/mentor that can commit to you and understands the problems and issues of emerging franchises — someone who will hold you accountable and doing what you need to do to move the company forward. Again, get help but stay involved in the process. Be transparent with the people you want to hire. They should know what to expect in the business.
Working with a vetted franchise consultant removes a lot of the pain from every aspect of franchise sales. Just like partnering with great attorneys and accountants, it’s well worth the investment.
Whether your franchise is a startup, is scaling, or just needs a fresh breath of life, franchise sales experts can provide the right insights and energy to help your brand achieve sales goals at every stage.
At EmmerScale, we help emerging franchise brands scale effectively. Our experienced consultants have the leadership strength and proven systems and processes you need to scale your franchise successfully. Schedule a free consultation call to learn how we can provide clear direction and set you on the right path forward.