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Expert Advice

Franchise Systems

Franchise Systems

The basic presumption of operating a franchise is that it is a system of operating your business.  This applies whatever the business activity actually is from a man and a van operation to a multi-unit food operator.

As a new franchisor especially, there may be a need to introduce technical systems and processes as a result of your expansion to ensure every franchisee, your staff and theirs operate the business in the way you want them to but also that you know that they are.

Starting a franchise operation comes with a number of expected costs; the franchise consultancy, the franchise legals, including the agreement and advertising for franchisees. However, there are others that are perhaps not as clear or thought of but will undoubtedly be important for running a good franchise.

The types of systems that franchising might trigger the need for consistency across the network include accountancy, network reporting, compliance, sales process, purchasing and franchise recruitment to name just a few.

Taking these in turn an accounting/network reporting system is key for you as a franchisor to know exactly how your network is performing, highlighting trends and most importantly the top performers and strugglers.  Understanding how the top franchisees are performing to share best practice is hugely important to the long-term success of the network.  Having an early warning of strugglers is equally important to understand, provide a solution and turn around, as a failed franchisee will really impact on your ability to find new ones and potentially obtain any finance needed from the banks.  Compliance is equally as important, particularly with regard to your system and health and safety, as a location can be shut down for not meeting legal requirements, which will clearly affect the trading of that franchisee.  A sales process will ensure franchisees and their staff follow the successful method but it should also be able to track every enquiry to understand what is successful and if there are any aspects of it that are not working so that changes can be made.  Franchisees may now need to purchase from you, if you provide a product, equipment, marketing material and workwear.  How will that happen, perhaps by an intranet shop?  Finally, franchisee recruitment would not have been required until becoming a franchisor and so a system for that, including regular communications to prospects, managing discovery days and where they are in your recruitment process is vital.

This article only covers a small amount of the systems needed to run a franchise business and there may be others related to the type of business you operate.  However, the best way to organize these is through a digital solution that can be adapted as the franchise evolves. So as a franchisor please do consider these things and take time to investigate the best option for each of them or a system that does it all.

Supplier Member
Azura Group

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