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Franchising is operating a business following strict operational processes and procedures from a business model that has been proven successful previously. As you are essentially using a successful franchisor’s knowledge of running this business to assist with the running of yours, franchising is considered a safer bet in terms of running your own business over a traditional business model. The main aspect of getting a franchise system working correctly is having all your systems replicable.
Franchising is expanding your business by enabling aspiring franchisees to manage a franchise unit in a particular territory. The franchisees will be in charge of running their unit, but they will be following the franchisors guidance and operational procedures and policies. As a franchisor, your business unit will have been running successfully for a period of time. What you need to do is capture exactly how you did that and how each and every aspect of your business works.
Once you have this you need to produce a detailed set of instructions that can be used by any new or existing franchisee. These instructions are mandatory to ensure the franchisees deliver a service that the franchisor knows is what your target audience wants.
The instructions themselves should be extremely detailed in the sense that a franchisee should never need to call a franchisor to understand what is required of them. The instructions will be very different depending on what franchise market you operate in and what service you conduct. Some examples could be how long before you send your end of service report after a client’s project to how many scoops should be on a particular ice cream.
To understand why franchise systems are so important, you need to understand the basic concept of franchising. Franchisors are there to provide a franchisee the guidance and materials necessary to run their business unit, however, they are not there to run the unit themselves. With an effective franchise system, all franchisees can operate their business without the need to contact a franchisor frequently about small details around operating the franchise unit.
The main benefit from an effective franchise system is how replicable it makes your franchise. With an effective franchise system, you can expand much faster as your franchisees will require less handholding and support. This means the franchisor can spend more time on either improving the entire franchise or they can look to increase the number of franchisees they have.
Your approach to implementing a franchise system should be two-fold, firstly you need to create an operations manual which can be used as a single point of reference whenever the need should arise. Secondly, you need to train all your franchisees to ensure that they understand what exactly is required of them to run and operate the franchise unit.
The operations manual is the most essential single document you need to run a franchise unit successfully. The manual itself will contain what should be considered your franchises trade secrets, which are the elements for which your whole company succeeds. This makes it very important to ensure that all franchisee’s keep the operations manual safe and secure. It is common that with the expansion of everything digital, that you keep your operations manual on a digital copy. If this is the case, extra cyber protection is needed so that it doesn’t fall into the wrong hands.
Training is needed for any job but the training your franchisees receive need to go above and beyond the normal remits required for training staff. You need to teach all your franchisees the franchise systems you have in place. They need to completely understand it, or otherwise, you run the risk of them selling inappropriate products and services under the franchises name. To understand why it is so important, you only have to think of how people perceive franchises. The benefit of franchising is that brand power can help any new franchisee in a new territory. If, however, they produce a negative service for their customers, it might impact sales for the franchise on a global level, even though it was a single franchisee that was at fault.
If you own a business and are looking to venture into the world of franchising, then we suggest that you start by talking to one of our franchise experts here.