Sign of the times – are you ready to become a franchisor?
Sign of the times – are you ready to become a franchisor?
The decision to implement a franchising strategy in your business is a difficult and important question to answer. Franchising has many definitions ranging from business model to marketing system to human resource strategy. This indicates the growing diversity with which small business owners and large corporate groups are adopting franchising as a strategy. In recent times the success of the likes of Boost Juice, Gloria Jeans, PoolWerx, Harvey Norman, ANZ Mortgage Solutions and the recent entry of groups such as Escape Travel, has prompted many organisations to consider franchising. The franchise strategies of businesses such as Grill’d, Matchbox, Healthy Habits, Pie Face, Trampoline, Wrappings, and Paraffine have demonstrated that businesses of all sizes and industries can develop a franchise strategy to succeed.
This article is written with the small and medium sized business owner who is focused on building a sustainable and enduring business for the franchisor and franchisee. Those interested in selling a few franchises which I refer to as transactional franchising, are better to focus their resources far away from franchising. The real question is how do you know if you are ready to become a franchisor?
How Do You Know When the Time is Right?
There is no single statistic, timing or set of circumstances that will enable anyone to give a concise answer to this question. It depends on your business, industry, level of development within the business, the timing in your career and business cycle, the cash flow and profitability, or the resource availability to name a few of the considerations.
There are a number of key signs that drive people to consider a franchising strategy. How an individual business owner is impacted is a personal decision but consideration of the following factors will offer some insight as to what has led to the creation of some of the most successful businesses within Australia.
Cash Flow and Profitability
The first point to clarify is the basic precondition to franchising. The business must be in operation. To contemplate developing a franchise system for what is nothing more than a well developed idea is not a sensible decision. A proven cash flow and profitability will be a sign that the business is operational and the end consumer has consistently demonstrated the business has sustainability and relevance. Over the years there have been many businesses that have come and gone that had franchising as the first move in bringing the business to life. Ask yourself what type of franchisee you would attract to a business that is an idea. You are asking the franchisee to assume significant risk with a complete start up and unknown quantity. The process of developing a franchise system, that can take 5-6 months, is significantly more professional, practical and commercially sound if the track record and operational experiences can be analysed.
Consider Matchbox, a leading homewares retailer in Victoria that granted its first franchise in the last 12 months after developing their franchise system. The Cohen family had owned Matchbox since 1996 operating 10 company owned stores prior to considering the franchise strategy. The ability to develop a franchise system that respected the history of the group and that reflected the commercial realities and experiences of running the business would not have been possible without a proven track record demonstrated by a faithful consumer following.
Grill’d, a specialist hamburger retail operation is another example of a group that had opened a number of locations after starting the business in Hawthorn Victoria in 2004. Grill’d had 4 key locations operational across Victoria prior to developing a franchise system and granting their first franchise.
It is however, not necessary for there to be a particular number of operations or locations that have demonstrated cash flow and profitability. There are small businesses that develop a franchise strategy and system after operating only one location. Often this location will have been in existence for a number of years but some operate for 12-18 months. In my experience the timing of this decision is driven more by the ambition, focus or the impatience of the founder once the initial set up phase has been negotiated.
People have in the past, and will continue in the future, to franchise what is nothing more than an idea. Those who have an existing business that is operational in some form with proven cash flow and profitability are in a much better position to explore or develop a franchise strategy.
A Burning Desire to Grow
This is one of the most important attributes that defines the franchisor. A person who is not content to operate one, two or three locations, or operate in one state. My experience of people such as Janine Allis (Boost Juice), Simon Crowe (Grill’d), John O’Brien (PoolWerx), Katherine Sampson (Healthy Habits), Jack Cowin (Hungry Jacks), Peter Irvine and Nabi Saleh (Gloria Jeans) to name a few, is the desire to grow significant businesses across Australia and beyond.
There are no doubt countless books that define the characteristics of the people with this ambition but in simple terms it is the vision, energy and commitment to build the business. A common misconception is the sole motivation is the money but if you meet these people at the commencement of the growth journey this is rarely a feature of the discussions. As with most small businesses cash flow and working capital limitations ensure people are well grounded in the realities of building a network.
Is the ambition a feature of your thinking? Has the business been established from the outset to have multiple points of representation? There are small things that demonstrate national growth is an early feature of people’s thinking when you see .com domain names registered, significant attention to detail in branding and trademarks, well developed processes and systems, and the early involvement of key people that will grow with the business.
In the early days of Boost Juice as a 2 store operation in Adelaide, national and international expansion was ever present in the thinking. The company has grown over 5 years with a tremendous commitment to sustainable growth with the entry into UK, Indonesia, Chile, New Zealand, Singapore and the GCC (Middle East) marking the start of another exciting chapter in the business.
The recent growth of Gloria Jeans in Australia under a Master Franchise arrangement and the recent acquisition of the parent company in the USA, and subsequent expansion, has created a situation where Gloria Jeans are in over 40 countries. This business started with a commitment to proving the business in Australia with a small number of stores before scaling to become the largest specialist coffee retailer in the country.
The burning desire to grow can be triggered at any moment in the journey of the business. It is not always a feature of the thinking at the inception of the business, as some people do not think about scaling the business until they have developed confidence in the business. The key ingredient is a restlessness that develops with the current operation that translates to thinking about bigger ideas for growth.
People Challenges
Do you have a strong foundation to the business that is delivering more work than you can find people? Is there another level of expansion or performance possible to leverage the brand and core operations if the right people could be found? Do you have a churn of people that is creating a quality issue with your consumers? How much of the company time is tied up with people issues? All of these are issues that in my experience have been a catalyst for people considering franchising as a strategy.
A reality of many of the OECD nations is the continual challenge of finding the necessary people to operate in the business. This could be as a retailer or as a service-based operation. To consider franchising in this context is not always about the volume of people it can be about the quality of operator. A significant feature of many business strategies and the basis of a competitive advantage in business is the quality of the service or product offering. To develop a brand with people who are unable to deliver the desired standards of operation will jeopardise the business.
At a corporate level the challenges of finding and retaining the best people is one of the key drivers of the franchise strategy for groups such as ANZ Mortgage Solutions, Escape Travel, Bendigo Bank, Optus, Telstra, and Bank of Queensland. The growth of a group such as Mortgage Choice that has grown from nothing to over 400 franchisees across Australia is a demonstration of franchising as a people strategy to secure the commitment of owner operators and share the outcomes with people who have some skin in the game. Some of the more complicated businesses at the consumer end of the business have been built on a franchise business model. Consider the food sector with McDonalds, Red Rooster, 7 Eleven, Subway, KFC, Dominos, Healthy Habits, Gloria Jeans, Hudsons Coffee, to name a few.
It is important to point out that this does not mean there is no role for company owned or employee operations. In fact I am of the opinion the lack of company owned operations is one of the weaknesses in many franchise systems today. There are many successful company operated business models such as Michael Hill Jeweller, Sports Girl, Sanity, and Flight Centre that have strong company operations.
The real issue to consider is where your business could go if more committed, quality people could be located.
Franchise Enquiry
Is this store franchised? This is a common driver of founders and owners considering franchising their business. This in itself is potentially dangerous. The reason is there are combinations of motivational factors that make franchising successful. Given the increasing exposure of franchising it is more and more common to meet or interact with people who may be thinking about being a franchisee or know someone who is a franchisee. Interestingly it is reasonably rare that many of these initial franchise enquiries translate into a committed owner operator with the necessary capital to sign a franchise agreement and operate the business. It does happen, but often with people who are interested in a quick dollar or the transactional franchising model.
The positive from the franchise enquiry is the interested party, often a consumer, has looked closely at your business and decided it has some key attributes they like. These expressions of interest may also come from existing employees who may be thinking about leaving or setting up in competition. Whilst this is also encouraging a prospective franchisor needs to take into consideration the primary motivations and think more medium term. The reality of the 5-6 month franchise program development period in itself distinguishes the people that are committed. Franchise enquiry is encouraging but should be nothing more than a reason to consider franchising.
Cross Roads
The cross roads is something that most people approach in their business journey at some point in time. Do you sell and move on? Is national growth an option? Is acquiring a competitor an option? Do I need to operate more company stores before considering franchising?
This is no different for the small business owner that is considering the future direction of their business. The timing of making the tough decisions arrives very early for some owners and very late for others. The people that are thinking about the future direction early tend to make a habit of thinking three steps ahead. For instance, many people establish their first store or mobile offering knowing they are committed to franchising the business at some point and consequently focus on brand, processes, systems and many other factors that will make scalability more achievable. Pie Face, a specialist pie retailer established its first operation in Kings Cross knowing that franchising was a key part of the future strategy and this thinking impacted the focus on key areas such as fit out, merchandising, branding, and system development. The other end of the spectrum has people operating in their businesses for 3 -5 years or more before any decisions about future direction are made.
The cross roads may also be represented by decisions about succession planning where a change of generation is approaching. This was a part of the Matchbox strategy where the involvement of the next generation of the Cohen family required a consideration of the medium term future of the business. The development of a franchise system, to complement the existing company store operation, was a key part of the ongoing involvement and commitment of the next generation of the family to grow a national network.
The remaining decision of whether to stay in the business or maintain the status quo really goes to the heart of the motivation of the owners as discussed above in ‘A Burning Desire to Grow’.
Competition
The perspective on the competition is always an interesting driver of the thought processes of an owner. At its simplest there are three options; we are better, the same or worse. It is not always a matter of timing or having to be first to market. Boost Juice was not first to market but clearly emerged as the market leader. Too much focus on the competition is also not healthy in my opinion as you are best to focus your efforts on what you can control rather than beat yourself up about what others are doing. Alternatively, the competition may have been the catalyst for your approach to the sector that both yourself and consumers are suggesting is a more compelling or interesting value proposition. The emergence of groups such as Mortgage Choice, Pack and Send, and Ultra Tune are all interesting examples where the position of the competition is sufficiently different that the development of significant national franchise networks was a possible.
The importance of competition is only a perspective on the status quo. The direction and changes within an industry over the next 5 years is what you can have an influence over and it does not have to be the world’s best invention to create an opportunity. A significant number of factors combine to make any particular business successful and a large part of this is the execution. Who would have thought the Domino’s pizza group would have such a rapid rise in a sector with large existing pizza groups, an established food offering and margin pressure. The answer is not many people and yet Domino’s successful public float of the company and subsequent acquisition of the European Master Franchise rights is testimony to the power of a successful plan and an ability to execute.
Capital
The decision to franchise will require an investment. As mentioned in a previous Franchise Magazine article by DC Strategy (You Want to Be a Franchisor?) there are two types of people entering franchising. Firstly, those who build a strong foundation with a view to building a sustainable business for the franchisor and franchisee. Secondly, those who are seeking to make money from selling franchises (transactional franchising) and are more focused on franchising than the value proposition to the end consumer.
The development of the franchise program is the foundation of the franchise system. There are a number of key decisions that are made during this phase which are absolutely critical to the future success of the business. This is an area where expert advice should be sought to ensure the franchise system is developed to a quality standard that will provide the foundation of the business. The development of a franchise system can take up to 5-6 months and the investment is between $70,000 to $200,000 depending on the nature and status of the business. Do you need to go to these lengths to develop a franchise system? This is a judgement of the individuals concerned but research of the most successful franchise systems will unearth a common trend that clearly indicates the importance of a quality foundation to the franchise system.
Given the development required it is important to consider the capital base of the business and understand the necessary investment and impact on working capital. The majority of emerging franchise systems are funding the development from working capital or debt. To contemplate a franchise strategy without the necessary capital will force short cuts to be taken that will produce a predictable outcome. It is very simple. If you want to develop and adopt a franchise strategy an investment of time and dollars is required. The advice of DC Strategy is either do it properly or stay away from franchising so as to avoid the headaches or disappointment at a later date.
Getting the Right Advice?
The quality of the development of the franchise system, business and legal documentation is very dependent on the quality of the advice. The research and due diligence the franchisor completes at the outset is extremely important. It is the opinion of DC Strategy there are too many people entering franchising for the wrong reasons. One of the main contributors is the insincere motivation of ‘expert’ advisors and bad advice. Franchising can still be the most appropriate strategy for your business but there is too much bad advice being given on how to franchise.
Where Next?
Having read this article you may be contemplating how this relates to your particular circumstances. If I had to pick one of the above signs, on the assumption there was proven cash flow and profitability, it is the burning desire to grow. This is what separates people and businesses apart. There are plenty of terrific growth stories from very humble beginnings and franchising can provide opportunities to small businesses that otherwise would not exist. Franchising has not peaked in Australia and it will continue to develop because owners of businesses are passionate about the successful growth of their business. Have a look at the founders of franchise systems you admire or respect and you will see these people are driven by their interests and they back themselves to build successful business.
Adrian McFedries
Adrian McFedries is the Managing Director at DC Strategy.
DC Strategy (formerly Deacons Consulting) is widely recognised as the region’s leading Strategy, Franchising and International consulting group. DCS has developed the networks and brands of many of the region’s most successful businesses. Contact Adrian McFedries at adrian.mcfedries@dcstrategy.com
Sign of the times are you ready to become a franchisor - To learn more about this author, visit Adrian McFedries's Website.
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Do you want to become a franchisor? This is a question many business owners have contemplated and for many the decision has been the key to building a successful business. Do you have any idea of what is involved? Could it be possible given the size of your business? Are the risks too great? Is there too much competition in the sector? These are all questions Adrian McFedries, Managing Director of DC Strategy, has heard before and this article seeks to detail some of the considerations deciding to franchise.
The decision to implement a franchising strategy in your business is a difficult and important question to answer. Franchising has many definitions ranging from business model to marketing system to human resource strategy. This indicates the growing diversity with which small business owners and large corporate groups are adopting franchising as a strategy. In recent times the success of the likes of Boost Juice, Gloria Jeans, PoolWerx, Harvey Norman, ANZ Mortgage Solutions and the recent entry of groups such as Escape Travel, has prompted many organisations to consider franchising. The franchise strategies of businesses such as Grill’d, Matchbox, Healthy Habits, Pie Face, Trampoline, Wrappings, and Paraffine have demonstrated that businesses of all sizes and industries can develop a franchise strategy to succeed.
This article is written with the small and medium sized business owner who is focused on building a sustainable and enduring business for the franchisor and franchisee. Those interested in selling a few franchises which I refer to as transactional franchising, are better to focus their resources far away from franchising. The real question is how do you know if you are ready to become a franchisor?
How Do You Know When the Time is Right?
There is no single statistic, timing or set of circumstances that will enable anyone to give a concise answer to this question. It depends on your business, industry, level of development within the business, the timing in your career and business cycle, the cash flow and profitability, or the resource availability to name a few of the considerations.
There are a number of key signs that drive people to consider a franchising strategy. How an individual business owner is impacted is a personal decision but consideration of the following factors will offer some insight as to what has led to the creation of some of the most successful businesses within Australia.
Cash Flow and Profitability
The first point to clarify is the basic precondition to franchising. The business must be in operation. To contemplate developing a franchise system for what is nothing more than a well developed idea is not a sensible decision. A proven cash flow and profitability will be a sign that the business is operational and the end consumer has consistently demonstrated the business has sustainability and relevance. Over the years there have been many businesses that have come and gone that had franchising as the first move in bringing the business to life. Ask yourself what type of franchisee you would attract to a business that is an idea. You are asking the franchisee to assume significant risk with a complete start up and unknown quantity. The process of developing a franchise system, that can take 5-6 months, is significantly more professional, practical and commercially sound if the track record and operational experiences can be analysed.
Consider Matchbox, a leading homewares retailer in Victoria that granted its first franchise in the last 12 months after developing their franchise system. The Cohen family had owned Matchbox since 1996 operating 10 company owned stores prior to considering the franchise strategy. The ability to develop a franchise system that respected the history of the group and that reflected the commercial realities and experiences of running the business would not have been possible without a proven track record demonstrated by a faithful consumer following.
Grill’d, a specialist hamburger retail operation is another example of a group that had opened a number of locations after starting the business in Hawthorn Victoria in 2004. Grill’d had 4 key locations operational across Victoria prior to developing a franchise system and granting their first franchise.
It is however, not necessary for there to be a particular number of operations or locations that have demonstrated cash flow and profitability. There are small businesses that develop a franchise strategy and system after operating only one location. Often this location will have been in existence for a number of years but some operate for 12-18 months. In my experience the timing of this decision is driven more by the ambition, focus or the impatience of the founder once the initial set up phase has been negotiated.
People have in the past, and will continue in the future, to franchise what is nothing more than an idea. Those who have an existing business that is operational in some form with proven cash flow and profitability are in a much better position to explore or develop a franchise strategy.
A Burning Desire to Grow
This is one of the most important attributes that defines the franchisor. A person who is not content to operate one, two or three locations, or operate in one state. My experience of people such as Janine Allis (Boost Juice), Simon Crowe (Grill’d), John O’Brien (PoolWerx), Katherine Sampson (Healthy Habits), Jack Cowin (Hungry Jacks), Peter Irvine and Nabi Saleh (Gloria Jeans) to name a few, is the desire to grow significant businesses across Australia and beyond.
There are no doubt countless books that define the characteristics of the people with this ambition but in simple terms it is the vision, energy and commitment to build the business. A common misconception is the sole motivation is the money but if you meet these people at the commencement of the growth journey this is rarely a feature of the discussions. As with most small businesses cash flow and working capital limitations ensure people are well grounded in the realities of building a network.
Is the ambition a feature of your thinking? Has the business been established from the outset to have multiple points of representation? There are small things that demonstrate national growth is an early feature of people’s thinking when you see .com domain names registered, significant attention to detail in branding and trademarks, well developed processes and systems, and the early involvement of key people that will grow with the business.
In the early days of Boost Juice as a 2 store operation in Adelaide, national and international expansion was ever present in the thinking. The company has grown over 5 years with a tremendous commitment to sustainable growth with the entry into UK, Indonesia, Chile, New Zealand, Singapore and the GCC (Middle East) marking the start of another exciting chapter in the business.
The recent growth of Gloria Jeans in Australia under a Master Franchise arrangement and the recent acquisition of the parent company in the USA, and subsequent expansion, has created a situation where Gloria Jeans are in over 40 countries. This business started with a commitment to proving the business in Australia with a small number of stores before scaling to become the largest specialist coffee retailer in the country.
The burning desire to grow can be triggered at any moment in the journey of the business. It is not always a feature of the thinking at the inception of the business, as some people do not think about scaling the business until they have developed confidence in the business. The key ingredient is a restlessness that develops with the current operation that translates to thinking about bigger ideas for growth.
People Challenges
Do you have a strong foundation to the business that is delivering more work than you can find people? Is there another level of expansion or performance possible to leverage the brand and core operations if the right people could be found? Do you have a churn of people that is creating a quality issue with your consumers? How much of the company time is tied up with people issues? All of these are issues that in my experience have been a catalyst for people considering franchising as a strategy.
A reality of many of the OECD nations is the continual challenge of finding the necessary people to operate in the business. This could be as a retailer or as a service-based operation. To consider franchising in this context is not always about the volume of people it can be about the quality of operator. A significant feature of many business strategies and the basis of a competitive advantage in business is the quality of the service or product offering. To develop a brand with people who are unable to deliver the desired standards of operation will jeopardise the business.
At a corporate level the challenges of finding and retaining the best people is one of the key drivers of the franchise strategy for groups such as ANZ Mortgage Solutions, Escape Travel, Bendigo Bank, Optus, Telstra, and Bank of Queensland. The growth of a group such as Mortgage Choice that has grown from nothing to over 400 franchisees across Australia is a demonstration of franchising as a people strategy to secure the commitment of owner operators and share the outcomes with people who have some skin in the game. Some of the more complicated businesses at the consumer end of the business have been built on a franchise business model. Consider the food sector with McDonalds, Red Rooster, 7 Eleven, Subway, KFC, Dominos, Healthy Habits, Gloria Jeans, Hudsons Coffee, to name a few.
It is important to point out that this does not mean there is no role for company owned or employee operations. In fact I am of the opinion the lack of company owned operations is one of the weaknesses in many franchise systems today. There are many successful company operated business models such as Michael Hill Jeweller, Sports Girl, Sanity, and Flight Centre that have strong company operations.
The real issue to consider is where your business could go if more committed, quality people could be located.
Franchise Enquiry
Is this store franchised? This is a common driver of founders and owners considering franchising their business. This in itself is potentially dangerous. The reason is there are combinations of motivational factors that make franchising successful. Given the increasing exposure of franchising it is more and more common to meet or interact with people who may be thinking about being a franchisee or know someone who is a franchisee. Interestingly it is reasonably rare that many of these initial franchise enquiries translate into a committed owner operator with the necessary capital to sign a franchise agreement and operate the business. It does happen, but often with people who are interested in a quick dollar or the transactional franchising model.
The positive from the franchise enquiry is the interested party, often a consumer, has looked closely at your business and decided it has some key attributes they like. These expressions of interest may also come from existing employees who may be thinking about leaving or setting up in competition. Whilst this is also encouraging a prospective franchisor needs to take into consideration the primary motivations and think more medium term. The reality of the 5-6 month franchise program development period in itself distinguishes the people that are committed. Franchise enquiry is encouraging but should be nothing more than a reason to consider franchising.
Cross Roads
The cross roads is something that most people approach in their business journey at some point in time. Do you sell and move on? Is national growth an option? Is acquiring a competitor an option? Do I need to operate more company stores before considering franchising?
This is no different for the small business owner that is considering the future direction of their business. The timing of making the tough decisions arrives very early for some owners and very late for others. The people that are thinking about the future direction early tend to make a habit of thinking three steps ahead. For instance, many people establish their first store or mobile offering knowing they are committed to franchising the business at some point and consequently focus on brand, processes, systems and many other factors that will make scalability more achievable. Pie Face, a specialist pie retailer established its first operation in Kings Cross knowing that franchising was a key part of the future strategy and this thinking impacted the focus on key areas such as fit out, merchandising, branding, and system development. The other end of the spectrum has people operating in their businesses for 3 -5 years or more before any decisions about future direction are made.
The cross roads may also be represented by decisions about succession planning where a change of generation is approaching. This was a part of the Matchbox strategy where the involvement of the next generation of the Cohen family required a consideration of the medium term future of the business. The development of a franchise system, to complement the existing company store operation, was a key part of the ongoing involvement and commitment of the next generation of the family to grow a national network.
The remaining decision of whether to stay in the business or maintain the status quo really goes to the heart of the motivation of the owners as discussed above in ‘A Burning Desire to Grow’.
Competition
The perspective on the competition is always an interesting driver of the thought processes of an owner. At its simplest there are three options; we are better, the same or worse. It is not always a matter of timing or having to be first to market. Boost Juice was not first to market but clearly emerged as the market leader. Too much focus on the competition is also not healthy in my opinion as you are best to focus your efforts on what you can control rather than beat yourself up about what others are doing. Alternatively, the competition may have been the catalyst for your approach to the sector that both yourself and consumers are suggesting is a more compelling or interesting value proposition. The emergence of groups such as Mortgage Choice, Pack and Send, and Ultra Tune are all interesting examples where the position of the competition is sufficiently different that the development of significant national franchise networks was a possible.
The importance of competition is only a perspective on the status quo. The direction and changes within an industry over the next 5 years is what you can have an influence over and it does not have to be the world’s best invention to create an opportunity. A significant number of factors combine to make any particular business successful and a large part of this is the execution. Who would have thought the Domino’s pizza group would have such a rapid rise in a sector with large existing pizza groups, an established food offering and margin pressure. The answer is not many people and yet Domino’s successful public float of the company and subsequent acquisition of the European Master Franchise rights is testimony to the power of a successful plan and an ability to execute.
Capital
The decision to franchise will require an investment. As mentioned in a previous Franchise Magazine article by DC Strategy (You Want to Be a Franchisor?) there are two types of people entering franchising. Firstly, those who build a strong foundation with a view to building a sustainable business for the franchisor and franchisee. Secondly, those who are seeking to make money from selling franchises (transactional franchising) and are more focused on franchising than the value proposition to the end consumer.
The development of the franchise program is the foundation of the franchise system. There are a number of key decisions that are made during this phase which are absolutely critical to the future success of the business. This is an area where expert advice should be sought to ensure the franchise system is developed to a quality standard that will provide the foundation of the business. The development of a franchise system can take up to 5-6 months and the investment is between $70,000 to $200,000 depending on the nature and status of the business. Do you need to go to these lengths to develop a franchise system? This is a judgement of the individuals concerned but research of the most successful franchise systems will unearth a common trend that clearly indicates the importance of a quality foundation to the franchise system.
Given the development required it is important to consider the capital base of the business and understand the necessary investment and impact on working capital. The majority of emerging franchise systems are funding the development from working capital or debt. To contemplate a franchise strategy without the necessary capital will force short cuts to be taken that will produce a predictable outcome. It is very simple. If you want to develop and adopt a franchise strategy an investment of time and dollars is required. The advice of DC Strategy is either do it properly or stay away from franchising so as to avoid the headaches or disappointment at a later date.
Getting the Right Advice?
The quality of the development of the franchise system, business and legal documentation is very dependent on the quality of the advice. The research and due diligence the franchisor completes at the outset is extremely important. It is the opinion of DC Strategy there are too many people entering franchising for the wrong reasons. One of the main contributors is the insincere motivation of ‘expert’ advisors and bad advice. Franchising can still be the most appropriate strategy for your business but there is too much bad advice being given on how to franchise.
Where Next?
Having read this article you may be contemplating how this relates to your particular circumstances. If I had to pick one of the above signs, on the assumption there was proven cash flow and profitability, it is the burning desire to grow. This is what separates people and businesses apart. There are plenty of terrific growth stories from very humble beginnings and franchising can provide opportunities to small businesses that otherwise would not exist. Franchising has not peaked in Australia and it will continue to develop because owners of businesses are passionate about the successful growth of their business. Have a look at the founders of franchise systems you admire or respect and you will see these people are driven by their interests and they back themselves to build successful business.
Adrian McFedries
Adrian McFedries is the Managing Director at DC Strategy.
DC Strategy (formerly Deacons Consulting) is widely recognised as the region’s leading Strategy, Franchising and International consulting group. DCS has developed the networks and brands of many of the region’s most successful businesses. Contact Adrian McFedries at adrian.mcfedries@dcstrategy.com
Sign of the times are you ready to become a franchisor - To learn more about this author, visit Adrian McFedries's Website.
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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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 and Sean Combs!
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