Tweet

Running a pilot franchise

Written by: Diarmuid Kieran

Article Overview: Advantages of operating a pilot franchise of your business

Running a pilot franchise

By operating a pilot franchise, the franchisor can prove the viability of his/her franchise concept and system. It is desirable that the pilot operation be company-owned. It is essential that the pilot should operate as far as possible with the same decentralised system as will eventually be employed for franchised outlets.
Franchising is about building on a simple, easy-to-learn, tried and tested method for conducting a business. The franchisor must be able to demonstrate that he/she has operated that business profitably for a sufficient period of time, and at a sufficient number of locations, to accept and encourage someone to invest their savings in it.
The pilot operation enables the prospective franchisor to assess the factors that will form basis of the expertise and know-how that he/she will transfer to the franchisee, such as the type and size of location, the equipment required, the operating methods, and marketing and financial requirements.
The successful running of the pilot operation is essential to the preparation of the franchise package. The experience obtained in setting up and running the pilot will provide the basis upon which the elements of the package are structured.

Related Articles
  10 things to discover before buying your franchise
  Starting up a Franchise business during a difficult economic time
  Franchisee checklist - assessing the franchisor
  Tragic Change in Poland
  Franchise Business: No experience? Not a problem!

Article Tags:



Related Forum Posts
Hello I am a franchise expert - Hello, I recruit franchise owners for successful franchise concepts based in the USA. Many of my franchises are looking to expand north to Canada in all major centers. I enjoy networking and answering questions about franchising. If anyone is interested in the franchise world or looking to buy a franchise then contact me. I have a wealth of information and like to help. Thanks for your time. Michael Somer
Re: Franchising Brokers vs Franchising Consultants - Franchise consultants are free and work with you without any obligation. they do not work for any one franchise but do get a percentage of the franchise fee when a franchisee that was registered with the franchise came from the consultant and the franchisee signs. They will try to match up your interests and skills to franchise businesses that are right for you. They can explain franchise guidelines and help you in any way they can. Franchise brokers usually get paid by the client and/ or franchise (generally get some type of commission). Additionally, they can get points or referral fee off the deal if they refer you to a lending resource too after they sell you on a franchise. Typcally they will try to sell a prospective franchisee on a larger deal so they get a larger commission.
Re: Which franchise would you buy? - The franchise to buy, the one that will succeed is the one that is either underrepresented or not represented in the community. Look at your community, identify what service is missing. That is the franchise to pursue. Too many people buy a franchise based on their "heart". A franchise is a "widget". I have found that once people began to investigate a franchise they had never thought of, but find their is a need; the entrepreneurial "gene" kicks in and they get excited. They began seeing the possibilities of success, and as they uncover the nuances of the franchise, they become more interested. It is the uninformed that are uninspired.
What is the Best Franchise? - As a Franchise Consultant I get asked this question on a daily basis. I work with clients to help them find the right franchise and through those conversations they almost always as me: "What is the Best Franchise?". There is no single answer for this question as the answer truly depends on the criteria you set as a perspective franchise owner. Meaning, maybe you want a retail location with 5 employees or a home based franchise with zero employees. Either way, the word "best" becomes relative to what is important to you. I realized quite some time ago that I could never "sell" a franchise to anyone. The only way someone will buy a franchise is if it makes sense for them & their family. Performing the proper due diligence is key to finding the best franchise for you.
Re: Franchising Brokers vs Franchising Consultants - I don't think you can really prevent this from happening but you must certainly be careful when you choose your franchise broker. My suggestion would be to talk to a broker from a reputable network such a FranChoice or FranNet. These people are good people. I guess you can tell right away if the broker is trying to get you to buy a specific franchise. If he tells you right off the bat that you "have to" buy XYZ franchise, well, to me it sounds like he's trying to "scam" you. On the contrary, if he really listens to you, really consult you and try to find out what's best for you, you will probably be able to tell. When I worked for Franchise.com, we had a brokerage unit called FranFit. The beauty of FranFit was that we were paid the same commission by the franchisor, whatever his industry or franchise fee. This way, there was no incentive for us to match a potential franchisee with a franchise or another. We were truly leveling the playing field and really looking for the right franchise fit for the buyer AND the seller.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Purchasing Real Estate using the SBA 504 Loan

Mistakes Made by New or Inexperienced Sales Staff

The Substance Abusing Employee

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.