Structuring a flawless franchise system

If you are considering the franchise route to expand the reach of your brand presence beyond certain geographical area, then this article is a must read for you.

By Ramanjit Kaur | May 18, 2010

Franchising is often considered as an excellent growth strategy for a business but it does not suit everyone, as it requires great amount of foresight, determination, and hard work. Besides this, a prospective franchisor is also suggested to do extensive research to ensure his clarity regarding financial inputs, commitment, and systems that are required to build a strong and sustainable franchise.

Here are enlisted few points that must be taken into account while developing a


franchise system:

Differentiate yourself in the market: In the brand cluttered market, franchising is one of the profitable ventures, if you need to make your brand stand out in the market. Apart from the brand name, you also have to differentiate your franchise system by clearly establishing the reasons that can convince an aspirant to buy your franchise. A huge amount of hard work is required to establish a strong foundation for your franchise business that can attract like minded entrepreneurs to raise its potentials for growth. 

Groundwork for franchising: A great deal of underpinning is required before selling your franchise. For this, you need to invest a lot of time and money in building a strong business model that can be replicated successfully anywhere. Being a prospective franchisor, you need to do a lot of paper work, develop documents (franchise agreement, operating manuals and so on), marketing collaterals to support and sell the franchise, facilitating training, and support for new franchisees. Once, you are done with these pre requisites, you need to advertise the requirement of franchisees to expand your business. For this promotional activity, you can use various media such as:

  • Print media: It is the oldest and most authentic mode of promoting a business and seeking franchise partners. However, this medium takes longer time to reach out to the target readers, but still it is one of the reliable mediums to communicate to the readers.
  • Electronic media: This is the fastest mode of communication and now has enough options under the tag ‘electronic media’ such as TVand radio.
  • Internet and social networking: The best and cheapest way to seek franchisees and promoting a brand name is to make use of the social networking websites.

Create a win-win relationship: As a new franchisor, your main focus should always be on creating a win-win situation rather than minting money in the name of franchise fee and royalty. You have to keep yourself in the place of a franchisee and then design the franchise system for your business. You have to reasonably structure your franchise fee and royalty thereby giving them enough room to yield a good return over investment. Being a franchisor, you should always keep in mind that franchisees are the route to revenue for your business.

Carefully select your franchisees: Never select your franchisees solely on the basis of their ability to invest money. Always have an eagle’s eye while selecting your franchisees as everyone cannot fit with your brand and business culture. You must carefully analyse the interest of the franchisee and his business acumen that can drive the business towards new heights. Being a franchisor, you must design some eligibility criteria and stick to it while selecting your franchisees as the fate of your franchise expansion depends directly on the success of your franchisees.

Building a strong support and training system: During the initial phase of the franchise business establishment, the franchisees need some hand holding. Being a franchisor, it is your duty to ensure efficient training and strong support system for your franchisees. However, the success of the franchisees depends on the ongoing support system.

These are few tips that a prospective franchisor must keep in mind before taking up the franchisor’s seat. Being new in the business, you are surely going to face some problems. However, building a strong foundation is the way towards developing a sustainable franchise business.

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