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Ensuring Franchise Success

Written by: Ian Macleod

Article Overview: New franchise owners have to do everything they can to give themselves a better shot at success. Okay, maybe we can’t guarantee you will be successful with your new franchise just by reading this article. (If you find an article that does guarantee that, you should probably stop reading it.) But we can give you some tips about what you need to be on the lookout for when starting and running your franchise. Unlike other businesses, franchises entail a relationship between the buyer (franchisee) and the seller (franchiser) that can lead to both opportunities and problems. Whether you are new to franchising or have experience, there are a few things you can do to help ensure your success:

Ensuring Franchise Success

ENSURING FRANCHISE SUCCESS

New franchise owners have to do everything they can to give themselves a better shot at success.

Okay, maybe we can’t guarantee you will be successful with your new franchise just by reading this article. (If you find an article that does guarantee that, you should probably stop reading it.) But we can give you some tips about what you need to be on the lookout for when starting and running your franchise. Unlike other businesses, franchises entail a relationship between the buyer (franchisee) and the seller (franchiser) that can lead to both opportunities and problems. Whether you are new to franchising or have experience, there are a few things you can do to help ensure your success:

1. Know your franchise agreement. As a new franchise owner, your business is built upon one thing: the franchise agreement. Ensuring a strong agreement through negotiation or amendments is a good step, but it isn’t the last one. You should always know everything there is to know about your franchise agreement, from the smallest detail to the most important provisions.

2. Develop a strong franchiser relationship. You bought a franchise because, at least in part, you wanted some backup. Use it. Develop a relationship with the franchiser organization. Know who people are, know what they do and learn how to interact with everyone. Just like any other organization, a franchise is a team and you need to know how to operate within it. Approach any problems from the point of view of “We’re in this together,” not “It’s me against you so don’t make me get my solicitor.” Cultivating a strong relationship with your franchiser can go a long way to making your life a lot easier.

3. Ensure territory. Starting a new franchise when no one else is there is one thing. Watching your business slowly erode beneath your feet as a new franchise pops up every other week is entirely another. Know what your territorial rights are and what is open to change. Ensuring your success is often dependent upon keeping a specific territory to yourself, or at least limiting competition as much as you can. Making sure you know what your territory is, what territories may be opened up to you or what competition may be in store in your future will go a long way to making sure your business is a success.

4. Don’t reinvent the wheel. Franchisers are an interesting breed. As entrepreneurs, they are self-motivated, independently minded people. As franchise buyers, they are also team-players working with an established company. Sometimes these worlds collide, especially in the early stages of business when a franchise owner wants to do everything themselves. If you are eager to do everything on your own, take a step back and recognize that much of what you are doing has already been done. You can benefit from the experience and expertise of other franchisees as well as the franchise organization itself. Use this knowledge base so you don’t learn through experience what you can learn through a simple phone call.

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Article Tags: amendments, franchise agreement, franchise owner, franchise owners, franchise success, franchisee, franchiser, franchises, lookout, negotiation, point of view, provisions, relationship, solicitor, territorial rights



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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