Looking for a brand with likely longevity and a long-lasting franchisee/franchisor relationship? Safwan Adam shows you how to lock into one
The global franchise industry continues to see immense momentum (according to the bfa /NatWest Franchise Survey, 97% of franchises are successful) and franchising continues to prosper even in a slow-moving economy, having grown 10% in the last four years with no signs of slowing down.
Given the obvious appeal of franchising, budding entrepreneurs constantly choose to grow within an existing brand as opposed to starting from scratch. If you’re new to the business, there are many questions you need to ask yourself and of franchisors too!
Just because franchising is a safer bet, it is not fool-proof and due diligence is everything when it comes to running a successful business.
There are countless benefits to franchising, from the immense growth potential to the security of being able to leverage a proven business model in front of financers and banks.
Franchising is a bridge between employment and starting on your own, safer route, with a free consultancy network to support you along the way. However, deciding whether you are ready to become a franchisee takes more than just knowing its time to go out on your own.
One of the greatest challenges for entrepreneurs is the ability to follow instructions and stick to strict guidelines. When you’re responsible for running someone else’s brand, there is limited room for creativity.
Overcoming this challenge is fairly simple. Budding franchisees must look for a brand that they believe in, a brand that they can work comfortably with, without feeling the need to re-invent the wheel to achieve success.
In order to find such creative synergy, it is vital that aspiring franchisees study specific metrics, from brand likeability to longevity and everything in between.
Once you have established readiness to enter the franchise industry, there are several other considerations to be made. There are seven easy steps to picking the perfect brand to franchise, ensuring both a long-lasting brand and a long-lasting franchisee/franchisor relationship:
1. Money: The brand’s existing relationship with a bank is one of the most important considerations. The No. 1 reason businesses fail is lack of cash for working capital.
If the brand is not strong enough to provide leverage against financiers and banks, then securing funding becomes an uphill challenge, one that is likely to end badly. When financers are hesitant to support a brand it can often be indicative of underlying issues within management or the brand’s performance itself.
2. Regulators: Regulatory bodies, like the bfa in the UK, provide structure and order to franchisor-franchisee relationships. The codes of conduct are strict but allow for partnerships to be forged in an ethical manner, whilst favouring the interests of both parties. Contracting with a brand that is not governed by such bodies can lead to budding franchisees being stung very hard.
3. Trends: Finding a product that is on trend is important. It seems like an easy thing to do, just jumping on the bandwagon of what is working and just go with the flow. However, foresight is crucial when assessing a brand, whereby the now matters just as much as the future.
Some sectors will never go out of style, others see peaks and troughs, for example the senior care industry is predicted to go through a franchise boom in the next few years. But as supply meets demand, it’s important to see where demands will begin to fall short.
4. Brand appeal: if a brand appeals to the masses it is immediately more likely to be successful than one that carries a niche appeal. It is important to note that niche brands can be franchised as well, however, given their limited appeal they tend to sit on the ‘boutique’ level and seldom grow with the pace and to the heights of those brands targeting to anyone and everyone.
Choosing a mass-oriented brand is the first step to securing long-term success, whilst small brands can sometimes make more money, a well-known brand is less likely to be a risk.
5. Brand imaging: If the brand is delivered in a tidy package, with sound branding and solid brand guidelines, franchisees receive the comfort of working a well-oiled machine. There are no loose nuts and bolts that will cause delays, loss or traction or other issues.
Brands that are unclear about their identity often lead franchisees into situations where they begin to shape the brand themselves, this can be both time consuming and also harmful franchisor-franchisee relationships where the franchisor is not open to change. A lack of strict brand guidelines can also affect the longevity of a business, making it a short-lived enterprise.
6. Presence: It is important to see how the brand already exists in the public eye. Watching out for important things like social media activity, brand engagement and media presence can tell you a lot about how favourable the brand is to the audiences. A brand that is liked will demonstrate strong and consistent indicators of a positive position, from high engagements levels to an active media presence.
7. Relationships: Speaking to existing franchisees can start to give you an idea of the franchisor’s way of working. Spending a lot of time with the franchisor to see how they are and how you can get along with them can also help determine how strong a relationship you can build with them.
It is important to note things like ambitions and appetite for growth, vision for the future and ability to listen to constructive feedback.
All of this works to ensure that your interests are aligned with those of the franchisor, making the partnership more likely to succeed. Seeking relationships with honesty, transparency and integrity is key to making a franchise partnership last a long time.
In addition to the above, many other considerations can be made. From working at the franchisor’s locations to get a feel of the business, its strengths and shortcomings, to just understanding what work will be required of you as franchisee.
Finding a brand that you can enjoy working on makes the job a lot easier to do for a long time. Ultimately a successful partnership is not a given with franchising, finding the right fit is not unlike finding a life partner, focusing on the strengths of today is excellent, but one must always keep an eye on the potential in the future in order to succeed in the future.
ABOUT THE AUTHOR
Safwan Adam is a young entrepreneur who acquired his first franchise, CeX, at 25
years of age. Since then he has successfully opened fivemore CeX’s all across London.
Having graduated from City University and qualified as an Aeronautical Engineer,
Safwan directed his attention to franchising six years ago, having since built his
company into a multi-unit company alongside his brother. In search for new
challenges, Safwan expanded his repertoire to other fields and now runs a multi-unit,
multi-brand company linked with several brands. Safwan believes in inspiring and
empowering staff to take ownership of their own performance and that of the
business at large, a leadership mentality that has served him well.