Evolving a Successful Small Business into an Extraordinary Franchise Network is a Challenge.

Many people want to franchise their business, but most fail to make a success of it.

To successfully franchise your business, you have to start with a successful small business as the foundation of the concept.

The base concept of franchising is to grow a network of businesses by granting of rights to use intellectual property to the "Small Business Owners”. 

Add the combined energy of a motivated group of successful small business owners using proven business systems that can be a nearly unstoppable market force.

There is no short cut. 

The network has to be built on foundations of successful small business systems that are fundamentally sound. Those systems have to been tested in the marketplace and evaluated, then thoroughly documented.

If the business is not built on the foundation of the Proven Small Business System,  the network will fail. 

You have to get your hands dirty and build test models of the business. Track the results, evaluate, document the procedures, and Proven by being tested and measured in the marketplace. 

An idea is not a business system. 

All businesses do start as an idea, but not all ideas turn into successful business systems.

It is the franchisor's responsibility to build the systems that transform the idea into functional business systems 

Unfortunately, many franchisors are using Franchisees as Guinea Pigs to test unproven brands and concepts. 

In recent years there have been many “Cool Ideas” that have been sold off as franchise opportunities. It can be Yogurt, Donuts, Chocolate,ice-creameries, Deserts or , Açai Smoothies sound fun but in reality, they haven’t got the proven track record in the marketplace.

Funky fads don’t lead to a long-term successful franchise network, a proven small business model certainly can.

Franchisors can be focused on rolling out concept businesses without taking the time to test and develop the systems. The elude of the up-front fees can be enticed would-be franchisors to roll out systems that have no valid proven record.

Historically, successful franchise networks have a business that delivers to the goals of family business owners. I recommend you keep this in mind as you develop the business systems. Family-friendly franchise systems empower franchisees to succeed.

They supply the support, training, and marketing that is required to guarantee that if franchisees use those systems they will reach the goals in their business. The happy family will lead to long-term happy franchisees.

Many franchisors hate slowing down and documenting their systems. But detailed documented user-friendly manuals are vital to share your intellectual property to others. If you have no documentation, you have no systems. 

The actual process of complying manuals is an interval audit of your systems. As you document your processes it becomes clear where the strengths and weaknesses are in your systems.  You will need to document everything covered in the manuals. I do mean everything, whatever you leave to chance will become the thorn in your side.

What if the business system has a flaw? 

Simply fix it, if it can be fixed.

Investing in developing the systems that overcome challenges in business can add value by becoming a commercial advantage for your franchisees.

If the business has a fundamental flaw that can’t be fixed don’t franchise it, some franchisors seem to believe passing the problem down the line fixes their problem. In reality to magnifies the problem. 

Fundamental flaws can be a coffee shop connected to shopping centres and the overheads are so high it is impossible for the Franchisee to receive a wage and return on his business investment.  The Franchisee was to either work 60 hours a week themselves or underpay staff to get by.  Eventually, this catches up with the franchisee they become a slave to the business until they fail, or they end up in legal trouble for wage thief of their employees.

Another example is in the Gym fitness industry.

The industry is very competitive and has tight profit margins. Staffing of Fitness trainers is a major cost for the franchisee.

Systematically, in the Gym industry Franchisors recommend franchisees place trainers on employee contracts that require them to work for less than the award conditions. This is a long-term recipe for failure. The good staff leave and again the franchisee is exposed to a certain risk of legal action.

If a business requires a special high-level skill to be a profitable business then it most likely isn’t a suitable model for a true franchise. Doctors or lawyers or dentists or farrier or veterinarians or physicists?

If the technical skill can’t be written up in a manual that anyone can learn that skill it’s not a small business system. 

A successful small business model is the foundation to build your systems on. The only way to evolve these systems is to enter the marketplace and get in the game. Test and measure a then evolve the systems. If it works keep it, if it doesn’t work change it until it works as effectively as possible.

But there is a trick for new players, that is the documentation of the manuals on each level of the business.

The four vital areas to document in your manuals

1.    Practical Systems.

Whatever it is: cleaning houses, mowing lawns, building houses, running a motel, making coffee, Management of a Gym or making Mexican food, Vacuuming gutter’s, the practical doing on every level of the business is clearly fundamental.

Every business was a level of practical skills. Simply Document all of them.

You can’t be too thorough. 

2.    Support Systems.  

Understandably, the foremost reason potential franchisees join a franchise network is for the promised support. The reality is franchisor support is essential for franchisee success. 

Support systems are a proactive positive way to give your franchisees the best chance of success. If all parties are aware of what is offered by “support systems” prior to the signing of the franchise agreement and those systems are followed, then there is less likelihood of a dispute down the track.

As a Franchisor the support systems will be the glue that holds the business together as you grow. I believe all franchisors in 2020 should have a business coaching system in place to proactive support and mentor their franchisees.

3.    Training Systems.

The initial training that is essential for every franchisee to start their business in your franchise system should be in-depth. Every area documented with a timetable and checklist to assure that basics have been supplied.

Ongoing training should also be systemized, that’s one on one or for the staff or group training at, monthly, quarterly or annual meetings 

4.    Marketing Systems.

Every business requires proven marketing systems to maintain constant growth. Every business should be marketing every day. 

The Marketing manual should cover whatever is expected of your franchisees. These expectations will vary from business to business, but these marketing and sales systems should be proven.

The franchisor should test marketing and sales systems before expecting franchisees to comply.

The sale systems are imperative to the success of any franchise system.

The level of sales skills required is comparative to the dollar value of the sale within the business.

Example: A real estate franchisee negotiating $500,000 house sales requires a higher level of sales skills compared to a pet groomer selling a $50 dog hydrobath or the waitress in a restaurant selling another round of drinks. But the sales systems in every business have the most direct impact on the success of each individual franchisee, therefore the impacts the success of the network as a whole.

Marketing and Sales can terrify many new franchisees.

New Franchisees are rightfully fearful. They know they require both support and training in all areas of the business.

Contrasting many franchisors get caught up in the practical systems and ignore the marketing and sales systems.  As a new franchisor developing all these systems it may appear to be quite daunting. 

For an experienced franchisor, it can be very confronting to observe the holes in your systems. The business systems on every level have to keep evolving as the marketplace changes, invest time, money, and resources to the ongoing development of all the systems.

A truly great franchise system has systems to improve the systems.

Systems do have to grow as the business grows. The stronger those systems are for your franchisees, the stronger the foundations of the whole network.    

Ultimately, Successful Proven Small Business Systems are the foundation of an Extraordinary Franchise Network.

If you need help with growing your franchise network or preparing your business for franchising, reach out?

Robert James

Specialist Franchisor Business Coach and Consultant

Best Selling Author of Balance: How to Make Your Business and Family Life Work Together

The Ultimate Guide To An Extraordinary Service Business