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10 vital franchising tips from the experts


10 vital franchising tips from the experts

A round-up of franchising guidance from a selection of the industry’s biggest names

A round-up of franchising guidance from a selection of the industry’s biggest names.

With 2021 right around the corner, now’s the time to take stock of your current operation and plan ahead for what could be the ultimate comeback year. Whether you’re a food and beverage frontrunner or a service superstar, here are 10 nuggets of wisdom from franchising’s finest:

1. Build to sell

“The only reason anyone should get into franchising is to get wealthy and control their financial future. Build to scale and build to sell. Buy a franchise that generates enough free cash that you want to reinvest into more franchises to generate even more free cash. Do this again until you get the snowball effect of compounded returns, and a much larger passive revenue stream; plus, the extra bite at the apple when you sell a much bigger franchise”

– Dan Rowe, Fransmart

2. Focus on a legacy

“The key consideration when getting into any new venture is to build strong foundations from the start so you ensure you are built to last. Have a focus on building a legacy and doing what you do better than anyone else. This, coupled with the right people committed to your vision, is a recipe for success”

– Pip Wilkins, British Franchise Association

3. Invest in your tech

“Invest in technology to help build profitable relationships with your franchisees. A franchisor’s proprietary intranet makes training, support, and marketing resources available to your franchisees 24/7/365. A web-based business management tool helps build franchisee sales and helps the franchisor support franchisees remotely”

– William ‘Bill’ Edwards, Edwards Global Services

4. Do your homework

“Look for a solid franchisor that has healthy financials, a strong management team, a positive track record of success, and high franchisee satisfaction. Review their financial performance representation, if they provide one, in their franchise disclosure document to determine their franchisees’ success. Also, think about choosing a business deemed essential during this pandemic. Talk to many of their franchisees as part of your discovery and validation”

– Catherine Monson, FASTSIGNS

5. Keep your finger on the pulse

“Today’s entrepreneurs need to have their fingers on the pulse of the market – both in terms of unmet needs and brand values that influence buying decisions. Gone are the days when simply providing a better service is enough; today’s franchisees and customers choose brands that satisfy both functional and emotional needs”

– Justin Mink, Scorpion

6. Follow your heart

“Three pieces of advice: join a great team, a winning team; a team that you align with, in their values and their vision. Invest in something where you can build a business that works for you, not just a job where you work for yourself. Then decide to follow your heart and do something you love, something that you will enjoy – not just something that will make you money”

– Brad Sugars, ActionCOACH

7. Consult the experts

“You will be shocked to hear that about 80 per cent of businesses that decide to franchise their concept fail. It all goes wrong at the very beginning of the franchising journey, in choosing a franchise development consultant. Only work with accredited development consultants with an exceptional track record, or run the risk of losing a great deal of money for both you and your future franchisees”

– Sean Goldsmith, Franchise Peer Boards

8. Ask searching questions

“International franchising can be a very rewarding strategy to pursue. However, as with everything in business it is not easy, and it will test you. Therefore, the first thing we recommend at The Franchising Centre is to have a very strong rationale for expanding your franchise brand into an international market in the first place. Think about why you want to do it, what the compelling business case is, what your goals are, and where international expansion fits in with your overall plans. We encourage people to ask themselves searching questions from the outset and often find ourselves acting as a sounding board for testing these early assumptions”

– Farrah Rose, The Franchising Centre

9. Rely on experience

“COVID-19 took us all by surprise and I anticipate that in 2021, new franchisees will be looking to invest either in tried-and-tested franchise models that have successfully weathered the pandemic, or new franchise businesses in sectors which would have been relatively unaffected by the virus. An entrepreneur moving into franchising would be wise to look at formats which fall into the latter category, with the usual caveats around ensuring their financial model is proven and robust before starting to sell franchises”

– Christine Kelly, Little Kickers

10. Future-proof, where possible

“We have seen tremendous upheaval in our society and economy this past year, but there continue to be opportunities for growth in franchising – especially as we look to 2021. Entrepreneurs investing in a franchise should adopt a clear strategy for their business operations. Understanding rent and fixed costs, cash runway, margins, labor needs, and tolerance for risk are vital components of the long-term health of your business. And of course, the most important thing is always to do your homework and research the brand and the contract before buying a franchise”

– Robert Cresanti, International Franchise Association

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