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The 5 worst things you can do when franchising a business according to a franchise consultant. 

Franchising a new business is inherently risky.

The path to successfully franchising a new business is fraught with difficulty. Acknowledge that you’re taking a risk, just like your franchisees are. Like many businesses, maybe even the one you are in now it’s a bit of a roller coaster ride. Running a business is certainly not plain sailing. Franchising is just the same, and this article might help you avoid some key errors..

When you franchise a business you’re really creating a whole new department within your current business. You’re not selling widgets anymore, you’re selling franchises. As a result your widget sales come via the franchises you’ve sold. Your franchises are in the middle of the client transaction now. Sure you might still be trading directly with your clients as you have historically done. but everywhere else you’re clients are now your franchisees.

franchising a new business

Going without experience is risky.

If I needed to cross a jungle I think I’d want a guide. When I learnt to sail I enrolled on several of the  RYA’s sailing courses and learnt to race boats with the help and support of numerous club racers at my local venue. Guidance, training and support are what you’ll give to your eventual franchisees but who’s there for you my fledgling franchisor? Franchise Consultants that’s who, and you need them more than you might think when you choose to franchise a business. Going it alone is a classic mistake, going with someone who has been there and done it means you grow faster, avoid the common errors and have more credibility in every aspect of your franchise proposition.

Franchising a new business take longer than you think!

When you design a franchise system around your current business that doesn’t take very long. Around 8 weeks in fact. But to recruit a full network of franchisees can take many years. Depending on your line of business you might only recruit 4 or 5 franchisees a year. Some of our clients recruit many more than this. We’ve had some brands with over 100 franchisees. However, you need to be prepared to be in the long game because you’ve got to kiss a lot of frogs.

As a result you may well be capable of selling 30 franchises in one year but 10 great franchisees are significantly better than 30 poor ones. So lesson two is to be brave and turn down the investment of the applicants you aren’t totally sure of. Build your network slowly, diligently and carefully. Step by step, and you’ll outperform all others in your category soon enough.

Iron out your wrinkles first.

I’m not referring to you, or your clothes. Let’s acknowledge though that every business is always in a state of change. If it isn’t then it’s time to start worrying! The moment you back off and coast along is the moment you can trace your failing business back to.  

But when you’re franchising a new business it needs to have gone round the block a bit. You’ve learnt your mistakes. You’ve optimised the model and you know that it works. Here’s a little test for you….

Can you look someone in the eye and say “if you do A,B & C, you’ll get X,Y and Z, But only if you work as hard as me and to the same standard”. Assuming of course either X,Y or Z is profit! If you can do that then you have a franchise opportunity ready. 

Not optimising your business model before launch is a huge mistake. 

Protect your brand name.

Do I need to say this? Ok I will. Register your trademark. Let’s not pad this paragraph out any more, just do it. 

If you don’t know how to do it then contact us and we’ll do ti for you inexpensively.

 

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