There’s a lot more to being an entrepreneur than having a great idea, although plenty of successful businesses have started with little else. Once you’ve done market research, created a business plan, and secured funding through loans, investors, partners, or other sources, you still have a long road ahead of you turning your idea into a tangible product that consumers want to buy. And from there you’ll have to operate efficiently and effectively to ensure longevity. But many entrepreneurs have loftier goals, like transforming a successful business into a successful franchise. This, of course, brings with it a whole other set of challenges to overcome. Here are just a few of the most common issues you could face when taking a small business to the next level by franchising.
- Securing capital. Until you get started, you won’t necessarily know the costs involved in building a franchise and it’s easy to underestimate the expenses. Since you’ve already done the work of creating your startup, you might think that mirroring that success is a piece of cake. Unfortunately, this is hardly the case. Not only will you have to create all the startup materials needed to ensure that franchisees can launch expediently and turn a quick profit, but you should also be prepared to support new franchises in a variety of ways while they get on their feet. After all, you need to feel confident handing over the reins to a third party. You stand to earn a tidy profit over time, but just like any new startup, you need to make sure you have adequate capital to begin.
- Securing franchisees. Building a franchise does not begin and end with finding someone, anyone, who is willing to pay for a franchise. You need to find the right people because you’re going to be working with them for a long time, if all goes well, and they’re going to represent your brand and contribute to the overall success of your company. In other words, you need to look for franchise owners that are properly qualified to operate your type of business.
- Creating a clear contract. You will almost certainly leave the details of drafting your franchise agreement up to a qualified attorney. So you need to select a lawyer that has the knowledge and experience to advise you as to what should be included so as to protect your interests and avoid potential problems or lawsuits down the line.
- Creating franchise materials. As the franchise owner, you will be responsible for providing franchisees with a variety of materials designed to help them start and maintain a branch of your company. This could include policies, standards and practices, and training manuals, just for starters, as well as management materials, guidelines for employee dress and behavior, in-store and marketing materials, and more. If you’re wondering where the money for franchise building goes, a fair chunk will likely be devoted to developing all of the paperwork involved.
- Knowing your role. You obviously want to protect your interests, perpetuate your brand image, and earn a profit, but you don’t want to be too inflexible or you’ll earn a bad reputation and scare away the prospective franchisees that are destined to put money in your pocket. A franchise business is meant to be handed off, and your role as the franchisor is to properly prepare your franchisees for that eventuality. Not only do you not want to be overbearing, but your franchisees don’t want to feel like they’re being smothered. And if you look at the success of franchises like Hampton Hotels, Subway, and GYMGUYZ Franchise, what you’ll likely find is that the franchisor sets franchisees up for success, offers plenty of support when needed, and doesn’t interfere with the ongoing operations so long as franchisees are meeting their performance goals.