10 Most Common Mistakes When Franchising Your Business
Franchising your business is a great way to expand your business and make more money, but not every business is meant to be franchised. Your business model must easily be replicable and your brand must be strong enough to bring in the customers for all your franchisees.
There are also a lot of other factors that go into franchising your business. Check out these 10 most common mistakes when franchising your business:
1. Giving too much leeway when it comes to site selection
One common mistake new franchisors make is giving their franchisees to much leeway when it comes to the site selection process. While their input is important, it is your business model and brand and you have the best idea of which locations would best suit for type of business. If you give them too much freedom, they might make choices that will hurt their chances of success which in turns affects your bottom line and image.
2. Selling too many franchises too quickly
While you are bound to be excited and want to grow your business as quickly there is always going to be some growing pains. If you rush the whole process without ironing all the wrinkles out first, you are not giving your franchisees the best chance at success. Focus on just one or two franchisees first so you can give them your devoted attention.
3. Not creating a training program
The whole point of joining a franchise program like yours instead of owning a business on their own is to take advantage of all the resources and training. So that is why it so important that all new franchisees go through your initial training program. Even if they have experience as a business owner, they need to learn how your particular business model works and what you expect from them. Right from the beginning, it is important to set expectations.
4. Picking the wrong person as a new franchisee
When choosing new franchisees, their financial resources is not the only thing you shouldn’t be looking at. They need to have some business experience, as well as a strong education history. They should be passionate about your business and a hard worker and a strong leader. Make sure you ask for their work history for at least the last five years as well as credit score and a criminal background check.
5. Compromising your brand
Always keep in the forefront of your mind, that everything your franchisees do affects your brand. So if they are operating their unit in a substandard manner, it affects how customers see your brands and could affect the success of other franchisees as well. Same thing if they have a lot of customer service issues or public relations crises.
6. Not understanding the role of the franchisor
One of the first things you need to make sure of is that you truly understand what your role as franchisor will be. And to make sure that is what you really want. While a business owner has their hands in every detail of the day-to-day running of the business, a franchisor is responsible for more of the overall bigger picture. You will be more focused on creating procedures and regulations, doing the training and making sure all your franchisees have the resources they need to do the actual day-to-day running. If you are a more hands-own person, then this might not be the best way to grow your business.
7. Not planning enough
This is definitely not something you can do by the seat of your pants. If you try to constantly make changes and revise as your franchisees are trying to get their units up and running, they are just going to get frustrated and the lack of planning could hurt the success of the whole system. Make sure you have all your i’s dotted and your t’s crossed before you even start recruiting any franchisees.
8. Not being ready
Just because your new business is doing really well doesn’t mean you should jump into the franchising game right away. You need to do well with your one business for at least a couple of years first to work out all the kinks and it is always a good idea to open up at least one other location on your own first too. It will give you an idea of what all will go into helping your franchisees when you finally decide to franchise.
A part of this is also making sure you have enough financial resources to run a franchise program. While you won’t need as much money as you would to open the location on your own, you still need enough money for creating and running the training program, hiring new staff and all the advertising and marketing.
9. Not being invested in your franchisees
It can be too easy to just see your franchisees as an easy way to make money. This is a grave mistake. If you don’t invest in your franchisees and offer them the right support and training, then they are not going to be successful, and inevitably you won’t be either. If your franchisees are going bankrupt and not lasting their first year in business, not only will you lose money, but it tarnishes your image and it will be harder to recruit new franchisees. It is best for everyone involved if you do everything you can to help your franchisees exceed.
10. Not require thorough training
Your franchisees and the people they hire are going to come in with varying levels of business experience and most of them are not going to have experience working with your particular business model so thorough training is crucial. The training program is should at least 6 weeks and should include both classroom and onsite training. You should also have a written test for them to pass at the end. Don’t let any of your new franchisees skip out on any part of the training program.
Avoiding these 10 most common franchising mistakes when franchising your business will help you get your franchise program off to the right start. It is also a good idea to hire a franchise consultation to help guide you every step of the way. Call MBB Management today to find out how they can help you with franchising a business.