Planning The Future Of Your Business. Expansion Challenges and Franchise Solutions To Grow Quickly, Organically.

Business owners are confronted with many challenges while trying to expand their businesses. We meet 100's of business owners every month, and most of them have different obstacles, which they feel, are important to address first, before they expand their businesses or want to understand as to how they can move forward and expand their businesses before competition or changing market dynamics may change their line of business and their positioning.

For some, it’s the difficulty of establishing the business in a new city or town while still running the business at home. “There’s just no way that I can spend enough time in Mumbai to get the business there up and running and still spend enough time in Delhi to stay on top of things”.

For others, it’s the difficulty of retaining employees who spend a lot of time on the field. “I can’t hang on to good sales people for more than a year or two, how can I ever hope to have a sales force to cover the whole country”.

For many, it’s the difficulty of raising sufficient capital. “I just can’t afford to invest Rs 50 Lakhs in each new outlet”.

A few also, don’t feel like they can trust others with their ways of doing business, secret ingredients of their business, or working with strangers who would not conduct their own business like they do themselves. The other day there was a business owners who has been running their generations old business, whose customers were legends like Mahatma Gandhi and now Lata Mangeshkar...but they are very scared as to how others will follow their business systems and satisfy customers who rely on the brand so heavily.

Or it may be the frustration of managing and motivating staff from a distance. “No matter how many times I tell them how to do it, they never get it right!”

Obstacles like these can often be overcome or even avoided altogether by opting to expand the business through franchising, effectively licensing somebody else to operate a business for you with your support.

But there are prerequisites:

1) A successful, profitable business with a decent balance sheet and other credible information to demonstrate success.

2) Proof of acceptability with consumers in at least one location.

3) A core value that you can offer franchisees. This may be one or, ideally, more of the following:

• A well-known brand with a recognized trade name and logo. (Not necessarily well known across the country, but could be successful in a city.)

• Knowledge of an innovative process for producing a product or selling it or providing a service.

• Access to specific articles, presentations and other written content.

• Exclusive access to suppliers of unique products or equipment or services.

• Thorough, proven systems and procedures describing how all aspects of the business are carried out.

4) You must be able to offer advice and guidance to help the franchisee set up and run their business. This may be offered through a written Franchise Operating Manual or Franchise Operations procedures or guidelines to begin with, formal initial training, ongoing training program, regular review meetings and informal get-togethers.

With this in place, you’ll need to work on the following to turn your successful business into a successful franchise:

1)You must be prepared to transform your thought process of running your business hands on, to being able to train other people, to run your business, your way, while you focus on franchising your business and your franchisees on running the front end of the business. You then start assuming responsibilities of working on things that add value to the entire businesses franchise system from the backend.

2) You must have a Franchise Operating Manual that describes in detail how each and every aspect of running your existing business is carried out. This becomes the blue print for future replica businesses run by franchisees. The franchise operating manual is often backed up with a training program for the franchisee and staff.

3) You’ll need a carefully designed fee structure that provides the right incentive to the franchisee. The most common arrangement is that the franchisor receives a sign-on fee up-front and a monthly management fee, either fixed or a percentage of gross sales. Often the franchisor also receives a marketing contribution. This will differ from business to business. The fees should be set at a level that allows a franchisee to make an attractive return on investment.

4) You’ll need to ensure that your proprietary marks and designs are protected. At its simplest this may involve registering your logo as a trademark. But you may also decide to take out patents or register copyright for any products or critical processes that you use in the running of the business. Registering the website and the online identity of the business is also important to ensure that you are able to protect your brand for clients reaching out to you from the web or searching you through those mediums.

5) You should consider what level of ongoing support you can provide. This can range from one to one review meetings to quarterly franchisee meetings where new business ideas are shared. Many franchisors run a nationwide marketing campaign. The best franchisors continue to develop new products and services to maintain the ongoing value of the franchise to franchisees.

6) Last but not least, you’ll need a comprehensive Legal Franchise Agreement that defines the obligations of the franchisor and the franchisee, outlines the resolution process in the event of disagreement and protects your business in the event of dispute or termination.

Of course, most businesses do not have all of the above in place. But with a little effort and attention to detail any successful, structured business can be developed into a franchise that can be replicated over and over again.

The above is intended only as a general introduction to franchising your business. An initial evaluation by an experienced franchise consultant will help you establish what needs to be done exactly for your business and to put a plan in place to franchise your business. Over the last 10 years of our work experience with several small, medium and large sized businesses, we have realized that each business has its own criticalities and it has to be franchised from their own individual strengths and weaknesses view point, while the above will form generalized requirements for most of them.

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