Franchisors: Essential Partners in Your Franchise Journey

How well your franchise performs will be hugely influenced by the franchisor.

We discuss three key factors but there are more, and how important each factor will depend on the experience of the franchisee, the type of franchise and the market.

1. Expert Guidance.

One of the main reasons to buy a franchise is to hit the ground running with a proven business model and an experienced co-pilot to help you navigate the right path and avoid pitfalls.

But what should this look like in a healthy franchise?

A detailed, well-written, and practical Operations Manual is essential. This is the DNA of the franchise system. It explains how to run the business and should cover areas such as measuring franchise performance, detailed operating procedures, and how to conduct business.

There should be an in-depth but engaging onboarding and training program. It should be sufficient in scope to give you the confidence to get started without being overwhelming.

These need to be backed up with regular follow through regular support and on-going training. This must include regular (ideally at least monthly) formal business reviews to understand if the business is on track. This is where the franchisors knowledge and experience can intervene early to mitigate any risks before they damage the business or the franchisor-franchisee relationship.

It is essential that their is regular, honest and healthy communication in both directions. This can be challenging, especially if there are concerns or issues, but should be encouraged by the franchisor.

A lack of a regular in-depth formal performance reviews should be seen by the franchisee as a red-flag. This when the franchisor can quickly help to tackle any business issues, such as low lead generation, poor sales conversion, low profitability or a deteriorating cash position.

2. Leads! Leads! Leads!

Generating leads for a start-up business can be extremely challenging. A business owner may invest significant amounts of money and time in marketing and advertising, only to see minimal or no results in a short period.

For a new franchise owner this should not happen. The franchisor must have an effective and proven marketing plan that will deliver good results - lots of leads! Good leads from your ideal customer!

A successful and established franchised business should also be providing leads and opportunities from head-office. The brand should be known and there should be a natural flow down of enquiries from national advertising, adjacent territories and the wider network.

3. Show Me The Money!

The franchisor will want his monthly fee, come rain or shine! Good sales or bad sales you will be expected to pay. If you don't you'll be in default of your contract.

If the franchise isn't performing as expected or planned then this can be a real drain on your cash and also feel wrong! Why should you pay out when you aren't getting the promised results?

With well run franchises you are unlikely to be in this position.

Why?

Because the franchisor will be effective in setting you up, keeping you on track and ensuring you are winning work!

The less reputable franchisors will ignore your situation and will tell you to pay as that is what the contract says!

In Summary.

The main reason to invest your valuable cash in a franchise, rather then going it alone, is the advantage of a proven business model with products and services that customers want. You should benefit from curated advice and support from successful industry experts who help keep the business on track!

If you not getting this support and still facing high monthly fees, you will likely struggle, and become disheartened. Many franchisees feel trapped due to long-term contracts of three to five years.

Not a happy place!

Let me know what your experience has been and if there are any other factors we should add to this list.