So you’re thinking of franchising? Firstly, well done for building up a successful business. Few business owners are able to make this exciting leap.
Of course, franchising is a huge decision and you’ll be busy working 24/7 whilst starting it up. Gradually things will ease off and your franchise will run itself, after which you’ll soon see the financial benefits. Aside from the obvious costs such as finding a new location, here are some of the other factors you’ll have to consider.
The extent to how independently your franchise operates is up to you, although many companies like to have some information still shared. You may want to set up a leased line – a private internet connection between you and your franchise for easy communication. There are many sites that offer leased line comparison, in order to get you the best deal.
Your franchise may have control of supplying their own stock, although some businesses such as restaurants and retail outlets may like to share stock occasionally in order to combat shortages. If this is something you plan to do, make sure that the travel distance between the two isn’t to great and that you can arrange transport between the pair.
One of the most important steps is hiring your franchisee – the manager of your new outlet who will running your franchise and upholding your brand. It will be important to find someone with management experience, but also someone who is enthusiastic about your business. You will be giving someone a huge responsibility and will have to train them in the ins and outs of your company. Conduct thorough interviews with candidates so that you can assess their personality and capabilities. It may be beneficial for them to bring their spouse along. Most people taking over franchises will be as inquisitive about your business as you are about them – you may feel like you are being interviewed during the process. This is the attitude you should look for, although be careful of hiring franchisees that seem too focused on making changes rather than continuing your business model.
There are no added legal costs to franchising in the UK. You may wish to join the British Franchise Association (BFA) that can help you grow and market your franchise. This requires meeting certain critieria, largely dependent on how autonomous your franchise is. It is recommended however, as the guidance and support that the group can give you will make the process a lot easier.
It will be important to get your accounts in check before setting up a franchise. Whilst not a legal requirement as it is in the US, franchisees will often want proof that your business is running a tidy enough turnover and that nothing dodgy is going on. You may also want to give guidance on certain spendings. Hire an accountant that can help you go over your books from the last few years so that you can present a good opportunity to any potential franchisee you are wishing to hire.