Steps for Successfully Franchising Your Business
Too many consultants and advisors treat the process of franchising your business such as preparing your FDD, issuing your operations manual, and other steps involved in the franchising process as the goal, but that's only the initial step. The goal and task at hand is to build a successful and thriving franchise system and while the franchising process is an important first step, its critical to understand and implement a game plan for what comes next. This includes learning franchising, seasoning your franchise offering, and leveraging the right growth strategies for growing your newly established franchise brand.
To successfully franchise your business and grow your franchise system, follow these steps:
- Step 1 - Understand what Franchise Success Can and Should Look Like
- Step 2 - Spend 18 Months Seasoning Your Franchise and What You Offer
- Step 3 - Build a Foundation Around Your Pioneering Franchisees
- Step 4 - Scale by Learning, Adopting, and Leveraging Best Practices
Step 1 - Understand What Franchise Success Can and Should Look Like
Begin with the end in mind. In addition to following the the steps for franchising your business, evaluate and consider what the successful development of your franchise system can and should look like today, next year, and over time. Questions to consider and evaluate, include:
- Franchise Launch - What does a successful franchise launch look like? How do I know if my FDD is competitively positioned? How does my franchise sales website stack-up with the competition and what are the brand factors and uniques that differentiate my brand?
- Franchise Seasoning - What are the steps that I should be taking to make my franchise offering and franchise brand more competitive over the next two years? How can I better leverage my story as a founder? How can we leverage the organic contacts and reach of our brand and, potentially, sell franchises to customers and people that are already fans of my brand?
- Leadership Alignment - Do my personal goals and business goals as an entrepreneur and brand founder align with building a franchise system over the next 5 years and beyond?
- Understand Costs and Budgeting - Beyond the cost of becoming a franchisor, are my franchise sales goals realistic? How much capital and funds should I budget for and spend on franchise sales and marketing?
- Learn franchising - What steps should I be taking to become a better franchisor? To learn more about the franchise industry? To build my skills and knowledge to make better decisions about the funds and capital that I will be investing in growing my franchise system?
Step 2 - Spend 18 Months Seasoning Your Franchise and What Your Offer
The process for franchising your business generally takes 3 months. In 3 months, you can go from where you are today to becoming a franchisor with your FDD is issued, registrations are pending, version 1.0 of your operations manual ready and being legally able to sell franchises. But, treat the next 18 months as a part of the launch process where you will be seasoning and building the foundation for a successful franchise system. During this seasoning period and process, focus on:
- Building, defining, and refining your founder and franchise brand story. Focus on telling a genuine brand story that creates a personal connection and creates an asymmetrical advantage in the sales process.
- Clarifying and clearing stating uniques of your brand - what makes your brand different from the competition and real-world advantages that your franchisees will experience.
- Building informative and effective franchise sales processes covering everything from the first email that you send to interested franchisee candidates to the process for conducting a discovery day and closing.
- Learning and adapting to the real world feedback you receive from franchisee candidates, broker, and peers about your franchise offering.
- Genuinely owning your challenges and building a counter-negative to real world issues that can present problems for your franchisees and how you will help them overcome them.
Step 3 - Build a Foundation Around Your Pioneering Franchisees
Understand that your first 3, 4, 5, and 10 franchisees will form the foundation for your franchise system. You need to support and over-support them. You must build, improve, and refine your systems to better support your franchisees. Learn from your experiences and constantly make improvements. Most important, focus on the unit economics of your franchisees and how you can help them achieve their sales goals and maintain healthy profit margins.
The success of your pioneering franchisees will determine the growth trajectory of your franchise systems. If you franchisees do not validate their decision to buy you franchise and do not achieve solid financial performance, your franchise system will not grow.
Step 4 - Scale by Learning, Adopting, and Leveraging Best Practices
As you complete and experience Steps 1 through 4, your franchise system should be continuously evolving and improving. Your brand should be differentiating itself from the competition, your franchisees should be strong validators of your franchise, your brand story should be focused on demonstrating the real-world transformation that you create for qualified franchisees. You've built a solid foundation and now is the time to focus on further scaling and growing your franchise system.
- Understanding the franchise industry
- Understanding what sells franchises and the sales processes that must be put in place
- Hiring and working with the right professionals and team members
- Learning about the practices that genuine management teams put in place to grow responsibly
Franchise Success is a Journey
When reflecting on our clients, their founders, their journey, and our personal conversations over the years from when we first launched their franchise to many successful years later when they're considering multi-million dollar valuations and potential exits, the most important thing for you to keep in mind is that franchise success is a journey. It's difficult. There are uphill climbs and lifts and, along the way, you'll need speciality tools - your franchise equivalent of ropes, pulleys, and guides - but, ultimately, franchise success will come down to you and your team.
The 4 steps that we've discussed in this article are game changers will help you BUILD A WINNING FRANCHISE SYSTEM!