10 Commandments for Companies Planning to Franchise Their Business

I've been in B2B and specifically in franchising for more than 16 years and I've seen a lot of people try to get into franchising and fail - not because their idea of their product was poor, but simply because they had no concept of the franchising environment.

So I thought, why not put a blog together on the things I've learnt that make a successful franchise.

To this end I've come up with:

The 10 Commandments for Companies Planning to Franchise Their Business

1. Knowledge
   It is crucial that you get to know the ins and outs of franchising, its distinct peculiarities, and how it might apply to your industry sector.
2. Market
   Every business, of course, needs a marketplace whether franchised or not. Be sure your business has a big enough market.
3. 'Franchiseability'
   To be a successful franchise, the business must be repeatable. It must have a business system and should appeal to a cross-section of people.
4. System
   A business system should be high on the list of must-haves. In fact, it can be argued that the product itself is less important than a robust business system. A good product is not guarantee of a successful franchise, but a poor system is virtually a guarantee of failure.
5. Manuals
   The method of operation must be thoroughly documented - sales/ marketing/ product/ pricing/ finance and accounts, etc. - all forming part of the system. The franchise owner must feel confident that if he/she follows the system they will achieve an element of success.
6. Documentation
   You will need formal documentation as well as systems manuals - primarily a franchise agreement and other documentation details the responsibilities between franchisor/franchisee/customers/suppliers.
7. Funding
   Don't try to create a proper and ethical franchise on the cheap - in the long run it is likely to fail. Be sure to allocate sufficient funds to develop the system, write the manuals, recruit franchisees, run pilot operations and survive yourself for at least two years before you draw from the business. A budget of £100,000-£150,000 is not unreasonable.
8. Recruitment
   Bring on board good franchisees - people who understand you are building the franchise, and who you believe will have the same passion and pride for the business as you.
9. Single-mindedness
   It is often tempting to bend your own rules, accept weak prospective franchisees with money, and chop and change the franchise agreement to suit the wishes of individuals, etc. Don't. Good franchise owners want strength, vision, leadership, a solid business system and ongoing support from their franchisor. They don't want, nor will they respect, a franchisor with no back-bone.
10. Take advice
    Speak to the BFA - gain advice from people with years of experience, and extend this action with reputable and ethical franchisors who have a solid business history. You'll find most franchisors will be happy to advise and help you.

So if you're interested in franchising or you have an idea or an existing business you think might be franchiseable then I hope these thoughts are of value. Remember though, at the end of they day good franchise owners want strength, vision, leadership, a solid business system and ongoing support from their franchisor.