One great option available to entrepreneurs and business owners looking to expand their companies, without massively increasing their own workload, is franchising. You gain all the benefits of far greater reach and enhanced brand awareness, not to mention a nice chunk of additional income, without having to worry about any of the deliverables yourself.
This has huge advantages when it comes to building a strong name for your service business and, depending on how popular your service is and what your brand’s reputation is like, you’re also set to make a pretty penny.
In fact, services businesses such as care franchises can not only create an entirely new revenue stream, but can also potentially replace your own service delivery and allow you to sit back, relax, and enjoy the fruits of your labours, for example you’ll manage a team of carers who do the caring and you simply oversee the running of the business (a management type franchise).
Here’s how to franchise your service business:
Create a business you can replicate easily.
Look at your business policies, procedures, and operations, and create written documentation of everything that goes into your company. This is essential to enable a new franchise buyer to immediately begin running the business themselves. Your buyers shouldn’t be left questioning what they need to do next or how they can make the business successful. From the admin to best marketing practices and hiring procedures, it should all be there with simple-to-follow instructions.
Make sure you can prove the business’ potential.
Data is your friend. Create reports that fully detail your business’ profitability, particularly if you’re planning on asking for a large investment where franchise fees are concerned. A potential franchise owner will want to know their investment is being entrusted to a strong business that has great potential for providing a healthy return.
Spread your wings in multiple locations.
Opening additional premises at a second or even third location is the perfect way to demonstrate the process involved in duplicating your business. Not only that, but it shows investors that your business model is transferable to other locations. When you have proven your business can not only survive but thrive in multiple areas, it allays their fears that the success you have achieved would not translate to their own locale.
Consider your employees as your first potential investors.
If you have key employees who have proven themselves to be loyal, experienced workers committed to your business, they are the first place you should look to for investors. Such employees are ideal investors because they already have a vested interest in your business, already know the ins and outs of how everything works and will know better than anyone the realities of whether or not your business is actually profitable and a good fit for them personally.
Getting people on board when there’s nobody on board yet is tricky, so offering to help out your employees if they’re not quite able to meet your upfront franchise fee is a brilliant way to get the ball rolling. You could offer then a payment plan or simply discount the fee. Either way, your first franchisees will be people you trust, and the fact there are already investors on board will make it an easier sell when you’re pitching strangers.
Figure out your pricing structure.
Are you going to ask for upfront investment in the form of a franchise fee? How much would that be? Will it include the provision of all necessary supplies and equipment? If so, be sure you’ve made it high enough to cover all those costs. With food franchises, you’ll need a reasonable amount of stock. Although not all professional services franchises will you need stock. Drainage and plumbing franchises may simply only require a kitted out van and small supply of cleaning equipment.
Are you going to charge royalty fees for every transaction? What about offering an equipment upgrade and taking a mark-up?
Sort out your legal documentation.
It’s important to cover all your bases by getting a lawyer to help you prepare all your documentation. This includes the franchise agreements, your disclosure documentation and several other documents that will ensure your business is protected in the event of a dispute with a franchise owner.
Check out the regulations.
When you’re operating a franchise there are certain regulations and pieces of legislation that you will need to comply with. These will vary depending on the type of franchise you’re running – for example, pet food franchises will need to comply with food regulations, while a dog groomer would need to comply with animal safety regulations. If you’re not very well up on legalese, consult with a specialist in franchise law to ensure you follow all the rules – you don’t want to be caught out!
Get your ducks in a row before you press go.
Probably the most critical thing when learning how to franchise is putting the time and research in at the start. Make sure you have all your proverbial ducks nicely lined up before you actually launch yourself into the world as a franchise. First impressions count. If your paperwork isn’t quite up to snuff, or you’ve failed to draw up all the paperwork needed but already have people waiting to sign on the dotted line, you’re in trouble.
Remember, investors will be coming to you because you’ve got this thing nailed down and can tell them exactly how to do it. Make a poor first impression by being disorganised, or not knowing the answer to key questions and they will lose interest, and never come back.
There are a huge number of franchises out there and a huge amount of preparation is required when buying your first franchise. But whether you’re looking at safety and security franchises or a more calmer approach with a home based services franchise like a virtual PA, there are equally a huge amount of resources out there to help you find your ideal franchise. Even once you’ve chosen your franchise, the franchisor will most certainly lend some training and support to help you to get off the ground.