I want to franchise in the future, is there anything I can do now?

You want to grow your business. You’ve done your homework and found that franchising is the best way to expand, but you are not quite ready to do it yet. You may not have the funds to go through the process or you may not have been in business long enough to prove the concept works. Do you just wait; or, are there some steps you can start working on right now?

Many small businesses tend to overlook important areas that make franchising easier. Sometimes they make choices that will be costly to modify when they decide to franchise. So, when you start with the end in mind you can save time, money and aggravation.

There are five major areas you should focus on as a business owner who is considering franchising in the future. These are: the business model, branding, equipment, vendors, and operations.

1.   The Business Model

  •  What is the value proposition of your business? That is, how does the business generate economic value?
  • Is the demand for your products and services sustainable? That is, will demand grow or at least remain constant for the life of the business; or, are the products or services just a fad?
  • Will the franchise business be profitable? That is, can you insert a third party and maintain profitability at all levels (your suppliers, you and your franchisees)?
  • Can your business be easily taught? That is, can most business people perform the activities; or, do they require extensive technical expertise and experience?
  • Does your business lend itself to continuous innovation? That is, will you as a franchisor be able to add value to your franchisees on an ongoing basis; or, is your business model static?

The key here is to tweak your business model so that it has a solid value proposition; it offer products and/or services for which there is an on going and growing demand; it’s profitable at all levels; requires little technical expertise and allows you to innovate on a continuous manner adding value to franchisees throughout the life of the agreement. If you are able to create or modify your business model in such manner, you can then move your efforts to the next biggie: Branding.

 2.   Branding

  • Is your business name unique, representative of who are and catchy? The more unique and memorable the name of the business the better.
  • Do you have your business name protected? Do not confuse having a website URL or a business license as protection. You need a trademark to protect the name of your business.
  • Do you have a good logo? Is it up-to-date? Make sure your logo is unique and professional. Put your ego aside and ask a professional for his or her opinion or engage them to create or modify your logo. Use ONLY ONE version of your logo. The moment you use more than one version you dilute your brand.
  • Are you using your protected name everywhere possible? This is a most important step. Make sure your name and logo appear on all printed and online materials:
    • Receipts
    • Invoices
    • Stationery
    • Business Cards
    • Order forms
    • Paper or Styrofoam cups
    • Paper napkins
    • Bags
    • Website
    • Blog
    • Social Media
    • Email signature
    • Vehicle
    • Advertising media
  • Does your store or location look the part? Is it professionally designed so it could be easily replicable? You may be able to make minor modifications overtime to create the image you are seeking.
  • How is your signage? Does your exterior sign reflect your image; and, is it congruent with your brand? What about interior signs? Do you have any? Are they hand made or professionally produced? Do you have a sign on your vehicle? Can your vehicle be wrapped and does serve as ongoing advertising?

The keys to branding are to choose a descriptive, unique and memorable name that you can protect; make sure you obtain a trademark; have a professionally designed logo that reflects your business image; promote your name, logo and image as much as possible via signage as well as printed or online communications and materials AND stick to only one logo and name, variations dilute all of your other efforts.

 

3.   Equipment and Store/Office Design

  • Is your business equipment the most efficient you can buy? Will you be able to use it for multiple locations? Does it make your life easier? Is it durable? Does it have good service? If the equipment you currently have doesn’t quite produce the results you desire, start looking for other models or brands that can. Contact those suppliers and get relationships established.
  • Is the business equipment available all over the US? Will shipping be possible? What will be the cost of getting the equipment to franchisees? Make sure the suppliers you choose can deliver and service all across the areas you foresee having franchisees.
  • Is the design of your premises congruent with your branding? Is it easily replicable? Can the design be made modular? Do you have drawings for the design that you can use to create a template for future locations? Is the design too costly? What are other alternatives that may require a lesser investment or time to build?
  • Do you have a list of every piece of equipment and fixture needed to operate your business? Make sure your list includes price and contact information of the supplier.

The key here is to be prepared to replicate the look and feel of your business as well as its functionality. Further, it’s important to be able to do such all across the US or where you want to expand.

4.   Vendors

  • Will your vendors be able to service all of your franchisees regardless of where they will be located?
  • Will your vendors be likely to negotiate volume discounts you can pass on to your franchisees?
  • Will your vendors be able to handle a large increase in volume?

The key to vendors is to make sure the ones you have today can become your “partners” as your expand your business in the future. If they can’t do that find other sources that are capable of growing with you.

5.  Operations

  • Have you documented the way you do business?
  • Do you have checklists for all tasks?
  • Do you have detailed job descriptions?
  • Do you have written procedures and policies?

You don’t have to have a complete operations manual but it’s wise to record as much as possible to prepare yourself for expansion. Take it slowly; do one task at a time; get staff members to record what they do. Creating checklists is easier and less time consuming than writing out an explanation of a process or procedure.

 Whether or not you franchise your business, paying attention to these five areas will increase its value. It will make it easier for you to train staff and to open future locations. Many of the businesses we work with end up increasing the profits of their own location just by tightening the procedures and the branding. Others reduce their costs by negotiating with vendors and suppliers. Focusing your energies on these five points is certain to improve your bottom line; and, when you get ready to franchise, the process will be quicker and much easier.