how to control your franchise

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 much control does a franchise owner have?

It's a very rigid business model. It's certainly not for everyone. That said, it's important to remember that the franchisor controls almost everything. From the products/services you'll be offering, to branding, training programs and even the technology you're allowed to use.

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 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 often do franchises fail?

A five-year study by the franchise consulting firm FranNet reported that 92 percent of their franchise placements were still in business after two years and 85 percent after five years. Because yes, sometimes franchise businesses can rise and fall like independently owned companies.

Do franchise owners take a salary?

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.

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.

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.

How much control do franchises have?

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 is a franchise structure?

A franchise is a small business. The franchise owner pays the parent company a fee along with ongoing royalties to operate under the parent company. Owners benefit from the parent company's reputation and advertising, as well as ongoing training that helps them start and grow their own franchise locations.

Does a franchise owner have complete control?

Unlike independent business owners, franchise owners don't have the freedom to change their products or services based on their personal desires or changing market conditions. To a large degree, the franchisor (i.e., the parent company) makes the decisions about product lines and other variables.

What are the responsibilities of a franchise owner?

Franchisee ResponsibilitiesPaying 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. ... Hiring and training employees. ... Running the business according to the standard expected of the franchisor.

How many hours do franchise owners work?

Owning a franchise unit can be demanding, requiring work of 60 to 70 hours a week, but owners have the satisfaction of knowing that their business's success is a result of their own hard work. Some people look for franchise opportunities that are less demanding and may only require a part-time commitment.

Do franchisees own the property?

No, the franchisor is the entity that owns the intellectual property, patents, and trademarks of the brand or business being franchised. A franchisee buys the rights and licenses to operate a location of the franchisor.

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 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 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 importance of franchising?

For this reason, franchisors must set strict rules for the use of their trademarks. They may strive to control the use and creation of marketing materials,” says Matthew Jonas, President of TopFire Media.

Should franchisors cede franchise control?

Another field where franchisors should cede some franchise control is local hiring . “Franchisors should leave hiring decisions in the hands of the franchisee,” says Ian Atkins, Financial Analyst and Staff Writer for FitSmallBusiness.com.

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.

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.

What Does It Mean to Franchise a Business?

Franchising is a type of agreement that entails reproducing a successful business model across multiple locations. As the business owner and franchisor, you would create a franchise agreement to begin the process and move toward opening a new franchise.

How to Franchise a Business

Once you decide to franchise your small business, you'll need to prepare to take on the new independent contractors that will run their individual franchises.

Franchising Your Business: Pros and Cons

Business ownership is rewarding work, and it often requires making tough decisions. Weigh the benefits and drawbacks of franchising your business to help inform your decision of whether franchising is right for you.