how to control franchise

Rich offers these six tips for managing a franchise:

• 1. Follow the proven system. ...
• 2. Hire the best people and treat them right. ...
• 3. Delegate to your employees. ...
• 4. Use what your franchisor gives you. ...
• 5. Manage your time efficiently. ...
• 6. Acknowledge the fact that you will likely need franchise mentoring and assistance. ...
• 7. Give yourself a chance to work on your business without having to always work in the business. ...

Full Answer

How can franchise quality be controlled?

4 Essentials of Quality Control in FranchisingWith strong quality controls in place, franchised locations very frequently outperform company-owned and hired manager-run locations. ... Legal Documentation. ... Franchisee selection. ... Documented systems. ... Training and support.

How do you manage a franchise owner?

10 tips for effective franchise managementCommunicate effectively. If you want your franchisees to emulate your success, there needs to be effective communication with them. ... Provide training. ... Lend support. ... Conduct trials. ... Audit franchises. ... Have clear goals. ... Recognize and reward. ... Get feedback.More items...•

How can I make my franchise successful?

Below, we've listed 10 keys for franchise success.Make sure you have enough money.Follow the system.Don't neglect your family and friends.Be an enthusiastic franchisee.Recruit the best and treat them with respect.Teach your employees.Give customers great service.Get involved with the community.More items...

How do you operate a franchise?

So if you're thinking of franchising a business or just starting out, keep these universal key steps in mind.Be Passionate About Your Product Or Service. ... Find Out Whether Your Community Needs This Franchise. ... Make Sure You Have Plenty Of Capital. ... Hire The Right Team. ... Pay Attention To Your Customer Service And Reputation.More items...•

How is franchise managed?

A management franchise is essentially a business that you own and operate, but with other people handling the day-to-day operations. As a result, rather than using a franchise name to offer your own skill set, as in job and executive franchises, you are in charge of the organization.

What is franchise strategy?

Put simply, a franchise strategy is a road map that gives your business direction by: outlining objectives. helping you to understand the landscape in which you operate. mapping tactics to achieve your goals. planning for any potential obstacles in the road.

Why do franchises fail?

A leading cause of a franchisee failure is the franchisee being undercapitalized. A lack of sufficient working capital can be the result of a slow start-up or the franchise operation requiring more working capital than the amount disclosed in the franchise disclosure document.

What are 5 keys to success in owning a franchise?

Five Key Ingredients for Owning a Successful FranchiseMotivation to Succeed. Successful franchise owners are devoted to their brand. ... Follow the System. Franchise owners are given a playbook for success. ... Open to Support. ... Avoid Burnout. ... Become a Valuable Community Member.

What skills do you need to run a franchise?

Five skills franchisors really wantEnergy. For any new franchisee, the responsibility for business growth should be the number one priority. ... Excellent communication skills. Strong conversational and interpersonal skills must feature in every franchisees repertoire. ... Dedication. ... Creativity. ... Confidence in their own skill set.

Who gets the profit in a franchise?

The franchisee will make money through profits gained through sales. Although a percentage of this will be paid to the franchisor through royalty fees, the successful franchisee can make a significant amount of money by selling the brand's products or services.

What makes a successful franchise owner?

Franchise owners engage with people on a daily basis. Being personable and friendly are key factors for success. Positive interactions with customers, employees, vendors and the community are essential in developing those all-important relationships.

What is the main purpose of franchising?

It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor's goods or services under an existing business model and trademark. Franchises are a popular way for entrepreneurs to start a business, especially when entering a highly competitive industry such as fast food.

What are you responsible for as a franchise owner?

As a franchisee, a business owner is responsible for the following: Paying the franchise fee and paying royalties to the franchise to help run the larger business. Finding, leasing and building out a location for the franchise. (As mentioned previously, most franchises will help extensively with this.)

What do franchise owners do on a daily basis?

A franchise owner's day will likely look similar to any business owner's day — some days could be focused on meetings, training and staffing, while others are spent focusing on marketing and sales building activities — but the actual day-to-day life of the franchisee will depend heavily on the specific goals of the ...

How does the owner of a franchise get paid?

How do franchise owners get paid? Franchise owners can pay themselves a salary or depending on their business entity, they may be able to take a draw from their accumulated equity.

Does a franchise owner have full control?

Does the franchisee have full control? The answer is no, but they are not completely powerless. Franchisees can choose how they want to run their business since the franchise system doesn't cover every aspect of running a successful business.

Why is quality control important in franchises?

Quality control is essential to the success of any organization. And this holds especially true for franchises. A franchisor’s key objective should be to sustain quality standards throughout its entire franchise system. Failing to establish and maintain quality ultimately leads to the downfall of many franchise brands.

Why is it important to be a franchisee?

It is important that franchisors look for potential franchisees that are not only committed to being franchise partners, but are also motivated to thrive. This in turn, will ensure quality, because an all-star franchisee will be driven to offer customers high-quality products consistent with the brand’s standards.

Why are franchisees motivated?

Deeply motivated franchisees often pair their commitment with their drive to succeed. This ensures that their customers’ needs are met with quality products. Ultimately, a business is a reflection of the owner, and this holds true for franchisors as well as franchisees.

What happens if franchisors select markets that aren't a good fit for their concepts?

If franchisors select markets that aren’t a good fit for their concepts, they might find themselves trying to mold their business to fit the environment in which it is located. Much like trying to fit a square puzzle piece into a round hole — it doesn’t work and can lower the quality of what they offer.

What should a franchisor take into account when selecting markets?

If a franchise depends on the business’ proximity to a supplier or producer, franchisors should make sure to take that into account when selecting their markets. Additionally, the demographic of a franchise’s audience should also be a factor when identifying a new market.

Where do franchises operate?

For example, a farm-to-table restaurant franchise, like Bacon Bros. Public House, operates best in a location with a relatively close farming community. We decentralized our food sourcing and production so fresh vegetables and other ingredients are shipped directly to each restaurant from nearby farms. Since suppliers play a large role in the products we supply, we strive to choose locations with farming communities within a 50-mile radius, and as a US-based franchise, this is not hard to find. If a franchise depends on the business’ proximity to a supplier or producer, franchisors should make sure to take that into account when selecting their markets.

Can a subpar franchisee hurt the reputation of other franchisees?

Additionally, a sub-par franchisee can potentially hurt the reputation of other franchisees in the system or prevent new franchisees from joining. Deeply motivated franchisees often pair their commitment with their drive to succeed.

What is the key to the success of your franchise?

An efficient and regular two-way communication flow with your franchisees is the key to the ongoing success of your brand. Tariq Farid, CEO of Edible Arrangements and recognized Entrepreneur of the Year by the International Franchise Association, considers it essential “to spend a lot of time communicating online with franchisees every week, evaluating their performance and assessing new challenges .”

Why is franchising important?

With franchising, the ability to be in store or on site in person diminishes rapidly. That’s why it’s so important to start building the elements early to keep control of your expansion.

What does it mean to franchise a business?

When you franchise your business it means that you have taken the necessary legal and business steps to sell franchises, support franchisees, and grow your brand. First and foremost, your franchise lawyer will have to prepare and issue a Franchise Disclosure Document that complies with federal and state law.

How Long Should It Take to Franchise My Business?

Typically, franchising your business takes from 90 to 120 days. Depending on unique factors related to your business or industry, there could be variations. A lot also depends on who you are working with and your internal team.

What Are the Franchise Laws and What Is a Franchise Disclosure Document?

Franchising is regulated and requires compliance with federal and state franchise laws.

Can a Franchise Developer or Consultant Prepare My FDD Instead of a Franchise Lawyer?

No. Your FDD is a legal document that requires the integration of federal and state-specific franchise laws and regulations and should only be prepared by a qualified franchise lawyer.

How Do I Get Started?

By reading this guide, you’ve already taken the first step! Now that you have a solid foundation as to what franchising is all about and the steps involved, start building the right team to help support and guide you in franchising your business .

How long do you have to give FDD to franchisees?

It’s required by federal and state law and is the legal foundation for your franchise. You are required to give prospective franchisees your FDD no less than 14 days before signing any agreement with a franchisee or accepting any payments from a franchisee.

What is the first stage of franchise development?

Stage 1 – The Franchise Development Stage is the franchise development stage where you take the legal and business steps necessary to call yourself a franchisor and start selling franchises. During the franchise development stage, major milestones include developing and issuing your FDD, preparing your operations manual, and competitively benchmarking your franchise offering relative to your competitors.

How to understand franchise management?

If you want to understand the business thoroughly block out some time each month to work on the ground, in the day-to-day operations of the business. Seeing, experiencing and talking to the people that make up your business will help you understand the challenges that franchisees face and the systems they need to drive higher profitability and growth. That way you can work more effectively to make improvements to franchise management systems logically and within the financial grasp of all franchisees.

How to know if your franchise management system will work?

The best way for prospective franchisees to know whether your franchise management system will really work for them is to ask . Connect current franchisees with prospective ones and let them sell your business. Make these conversations happen, create a list of top performing, trusted, reliable and confident franchisees. Ask them if they’d like to work on your business development scheme/scheme and start rolling it out to new and prospective franchisees.

How to communicate with franchisees?

Always keep in contact with franchisees, don’t let them feel abandoned. Share information as it comes available and don’t let things go quiet. Set up private forums or social media groups in order to create and monitor discussion s. However, as well as open forums, it is important that franchisees feel they can easily have a private conversation. Make sure you get in touch with franchisees as soon as they express any concerns. If not discussed they could fester and create undesirable rumours. Give out a specific helpline number or email address to existing franchisees only. In this way you can easily track and monitor concerns. For tips on improving your franchise communication read; 7 Steps to Effective Multi-Location Business Communication by Local Fame.

Why do you give your franchise a high profile title?

Note: Give your scheme a high profile title so existing franchisees feel privileged to be part of it. Being part of the scheme will also take up more of their time, so reward them for this.

How to grow your franchise network?

Many are fixated on establishing new franchisees. However it’s easier to keep and maintain franchisees than establish new ones. Invest in your current franchisees if you want to grow your network. Put procedures in place to help and encourage them to grow into multi-unit operators. What platforms can you use to improve productivity, share information etc? Friendly competition can motivate and drive business.

What do franchisees do after working on the ground?

After working on the ground within your network you are bound to uncover new strengths and flaws in how each individual performs. Gather feedback and knowledge to help solve challenges. You might be surprised to find that things some do well could be rolled out as standard procedures.

What is good practice for franchise management teams?

3. Plan for growth, achieve big goals. If your business is geared for growth, so too will your franchisees.

What kind of control does a franchisee have?

It might not be as much as what independent business owners have, but safe to say—franchise owners are business owners. It’s the reason why franchises differ in profitability. The secret lies in management.

Does the franchisee have full control?

The answer is no, but they are not completely powerless. Franchisees can choose how they want to run their business since the franchise system doesn’t cover every aspect of running a successful business.

How to maximize the value of a franchise?

It is important for the business owner to maximize the entire value of the franchise system by abiding by the established methods and honoring the brand you bought into. Any solid franchisor has your back and will support you. At the end of the day, however, helping yourself and managing your business effectively is a huge key to continued franchise success as well.

How to become a franchisee?

1. Follow the proven system. For those franchisees that came before you, it’s very likely to work for you too, if you follow the systems already set up. 2. Hire the best people and treat them right. Your most important resource is the staff.

Why do franchisees delegate to employees?

That is why we hire employees. Delegation relieves some of the load from the franchisee and provides the employee a sense of importance and ownership in the operations of the business.

Why is it important to have a solid franchise system?

A solid franchise system works to help hardworking people build something for themselves and their families without having to reinvent the wheel. Of course, you also will need to be committed to the tried and proven business model and the franchise system that has worked for others who came before you. Learning how to best manage your franchise business and applying those lessons is crucial to owning and operating a successful franchise.

Why is franchising an appealing option?

Whether you relate to these cases or have your own valid reasons for wanting to start your own business, franchising becomes an appealing option because you can be your own boss but also have the support and training from a company that will have your back.

How to manage time efficiently?

Manage your time efficiently. You should work with your team and do all the things you need to address today’s workflow but pay attention to the bigger picture. Attend to those important tasks and develop the presence of mind to know when to proceed to the next item if something is taking more time than expected.

What is the most important issue to consider when drafting a franchise agreement?

Systems, and the corresponding level of control over the franchisee, is one of the most important issues to consider when drafting the franchise agreement.

What is the lesson to be learned from franchising decisions?

The prime lesson to be learned from these decisions is that the greater the control a franchisor exerts over its franchisee, the greater is the likelihood that a court will find the franchisor liable for the acts of its franchisees and/or its employees. In certain industries, such as hospitality, the necessity of a heightened degree of control becomes a balance between the brand’s strength and the risk of liability.

How Much Control?

Next to the importance of branding, a key ingredient to the development of a successful franchise is the crafting and implementation of an effective “system.” By system, I mean the standards and procedures developed by the franchisor, and required of the franchisee under the franchise agreement, to ensure the brand’s success. These systems vary greatly from industry to industry, and are as diverse as the number of franchises throughout the world.

What are some examples of franchisor lawsuits?

Plaintiffs have pursued a variety of such claims against franchisors, who are perceived as the financial “deep pockets.” Examples of litigation include: (1) personal injury and death caused by defectively designed hotel-industry systems, which were found to have remained under the control of the franchisors; (2) business-related claims asserted against a franchisor resulting from the intentional torts of its franchisees; (3) Title VII racial discrimination claims by customers; and (4) the on-premises sexual assault and beating of a franchisee’s employee, who then sued the franchisor. In each of these cases, the courts addressed the issue of franchise control, and specifically, to what degree the franchisor controlled the day-to-day operations of the franchisee.

What should a franchisor consider?

Franchisors should consider whether the extent of their control over the franchisee is worth the foreseeable risks, and draft their agreements and operations manuals, accordingly .

What is a franchisor?

The franchisor, under the franchise agreement and/or operations manual, controlled the day-to-day operations of the franchise business; and

Is a franchisee an agent of a franchisor?

Second, as noted earlier, franchisees are generally not the agents of the franchisors, and so, the franchisor should not be responsible for the acts of the franchisee.