Franchising can be an excellent opportunity for an entrepreneur. It can be a win-win for franchisors and franchisees alike. One of the major goals is to make sure both are working together to ensure great success.

In order to make this happen, it’s important to establish rules and boundaries. New franchisees should consider reviewing the following five rules and boundaries. Following them will make a difference between success and struggle.

While being a franchisee has its challenges, success is assured if you know what to do. And these rules and boundaries must be set and followed accordingly. Let’s begin with what you need to know now.

Take advantage of thorough training programs

One rule that you’ll want to establish with new franchisees is to implement comprehensive training programs. These are designed to ensure that they are well-trained to succeed. The training covers plenty of business aspects including operational procedures, marketing strategies, and customer service among others.

You want to make sure each training program is thorough but simple for franchisees to understand and follow. This will give them the proper training they need to be competent, well-equipped, and able to navigate the common challenges they face in running a franchise. At the same time, it will teach them how to capitalize on various opportunities. Especially the ones that will help them improve their franchise overall.

Clear communication must be established

Communication is one of the most effective tools of business success. For this reason, franchisors and new franchisees must make it important for each other to communicate on a regular basis. This includes regular updates, scheduled meetings, and anything else that is considered necessary to where both parties can benefit.

If there are questions to be asked or concerns to address, communication is important. Make sure both say their piece and are listened to accordingly. This can lead to ideas that can improve business and the overall relationship.

Communication can be useful when it comes to operations, marketing, and all kinds of moving parts that can make a franchise work. Clear communication is the name of the game.

Be sure to keep the lines of communication. Mutually agree on which channels are the best options possible. Don’t take communication for granted.

Set guidelines that are consistent with the brand

Brand consistency is one of the pillars for any franchise. New franchisees should be able to have access to brand guidelines that are clear and articulate. The aspects of this include the logos, color schemes, and the overall customer experience.

As a franchisee, you have a responsibility to preserve the integrity of the brand. At the same time, you also help create an image that will resonate with customers. If there is a rebrand, it is important for franchisors and franchisees to communicate in order to know what has changed as it can have an effect on overall operations – for better or worse.

It may also be a good idea for brands to let their customers know about the changes. This way, they aren’t met with surprises the next time they patronize your franchise. As we’ve mentioned before, communication goes a long way – especially with your customers who have given you business for a long time.

Make financial transparency important

This is important for those who are considering the idea of franchise investing. Financial transparency will either make or break one’s decision to make a worthy investment. A smart investor will perform due diligence such as taking a look at any financial information that may indicate how well a franchise is performing.

These investors who do their homework understand which metrics to follow. They each have their own guidelines that can indicate “green light” or “red flag”. For this reason, you want to be transparent and upfront as possible regarding the financial aspect of a franchise.

For franchisors, you want to communicate the financial obligations like initial investment costs, royalties, and other fees that are a part of the franchise agreement. Give them a clear idea of how the investment will be used so they know their hard-earned money is not a wasteful investment. It should also be noted that financial reporting and regular reviews should be done so accountability is held for both the franchisor and the franchisee.

Review performance metrics regularly

In order for any franchise to be successful, it’s important to review the metrics on a regular basis. This will give you a glimpse of how well a franchise performs. From there, you have enough data to make business decisions that will ensure your franchise survives.

For example, the financial metrics will be one of your most vital figures to look at. The reason for this is that it can be used to pay staff, invest in inventory, and more. The metrics need to be accurate and reflect the success (or lack of).

This will allow franchisees to make the necessary decisions such as adjusting inventory, hiring or cutting staff, or anything else that pertain to operations. No one should ignore the numbers as this can lead to franchise failure.

Franchisees must be trained on what metrics to follow to help them make the best possible decisions. Data-driven decisions have long been the best way to move a franchise forward – even if the decisions made were for the purpose of saving a franchise that has experienced struggle over time.

Final Thoughts

If you’re a franchisor, working with new franchisees can be exciting. However, these five rules and boundaries must be established in order for the partnership to work out. Every successful franchise is possible if these are followed accordingly.

Establish communication boundaries between yourself and your franchisees on a regular basis. At the same time, work together to make any necessary decisions that can benefit the franchise as a whole. As always, focus on what is considered important such as customer satisfaction, maintaining brand identity, and watching the numbers that pertain to overall performance.

As a franchisor, you can find the right people who are interested. Even new franchisees will be excited to take on the opportunity so long as they have the willingness to be trained properly and understand the protocols and procedures of operation.