Become a franchisor

We recommend that you take these steps if you want to become a franchisor:

  • Research the market fully to ensure that your products and services are competitive and distinctive enough to be franchised – and that customer demand is sufficiently widespread

  • Produce a Business Plan outlining proposals in full and include a detailed SWOT analysis

  • Protect all intellectual property rights by registering trademarks, trade names and patents with the relevant offices

  • Test the franchise in the form of a pilot operation lasting at least 12 months – longer if the business is seasonal. The pilot scheme should be operated at more than one location to test the concept in different geographical areas. A comprehensive pilot operation will prove the viability of strategy and approach, highlight problem areas, and enable the franchisor to fine-tune the package before fully committing to developing a network

  • With the pilot operation running successfully, the franchisor can prepare to launch their network. At this stage, the franchisor should instruct a solicitor experienced in franchising operations to draw up a comprehensive franchise contract setting out the obligations of each party - including how the fees, mark-ups on supplies and any other payments from the franchisee are to be calculated. To prevent possible conflicts in future, these obligations should be made clear to the franchisee at the outset of any agreement.

  • Produce a Prospectus to attract suitable franchisees and to determine the criteria for franchisee selection

  • Produce a comprehensive operations manual and training programme for franchisees that will enable the franchisor to set and maintain standards for all aspects of the business – most notably customer service – across the network

  • Establish a central management function and, possibly, field support staff to support the franchise network, and set up a system to monitor the performance of all franchisees

  • Develop a marketing, sales and advertising strategy to promote the franchise network and, more specifically, when competing against other companies whose products and/or services may be better or as well known in the marketplace

  • Seek expert advice from the British Franchise Association (bfa) and attend a one-day Franchisor Seminar

Before income streams begin to flow, the franchisor will need to commit a substantial amount of time and money to cover the costs of:

  • Conducting market research

  • Operating at least one pilot scheme

  • Creating promotional material to explain the benefits of the business to potential franchisees

  • Selecting and training franchisees

  • Developing a comprehensive Operations Manual

  • Forming a central management team

  • Purchasing initial stock and equipment

  • Launching the franchise network with an advertising campaign

As soon as the network is up and running, the franchisor and the central management team will need to monitor the performance of the outlets continuously.

This will enable to franchisor to:

  • Maintain minimum operating requirements and uphold quality standards

  • Identify any franchisee who needs additional support in operating their business successfully – particularly in the early days of launching their franchise

The ongoing commitment of the franchisor through training, product development and other support, is essential to the success of the franchise network.

 

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