how to manage a franchise business

10 tips for effective franchise management

• 1. Communicate effectively If you want your franchisees to emulate your success, there needs to be effective communication with them. ...
• 2. Provide training You have a vision for the business. ...
• 3. Lend support Starting a business might not be easy for all prospective franchisees. ...
• 4. Conduct trials ...
• 5. Audit franchises ...
• 6. Have clear goals ...
• 7. Recognize and reward ...
• 8. Get feedback ...

Full Answer

How can I start my own franchise business?

When preparing for your big day, a few tips can help make it a success:

• Choose a date with high traffic. Your opening date and time should be ideal for attracting as many people as possible.
• Advertise to your local market. ...
• Send press releases to local media outlets. ...
• Invite friends, family and city officials. ...
• Decorate the store with grand opening paraphernalia. ...
• Organize exciting activities on opening day. ...

How to run a successful franchise business?

• Choose the right franchise. Franchisees whose skills and interests are a good fit for the business are usually more successful than those purely tempted by the financial opportunity.
• Follow the franchise system. ...
• Have a business plan. ...
• Take advantage of franchisor support. ...
• Be friendly with your franchisor. ...
• Have sufficient funding. ...

How to successfully franchise your business?

• Present Your Business to Potential Franchisees. After identifying your goals, you may now sell your franchise business model to your prospective franchisees.
• Provide Hands-On Training. If you have a vision for your franchise business, your franchisees must share the same objectives with you.
• Work On the Ground. ...
• Implement The Organizational Culture. ...

What do you need to know about starting a franchise?

Starting a Franchise. At its heart, starting a franchise is all about licensing. In the franchise business world and using franchise business models, business owners, known as the franchisees, purchase a license to use any trademarked logos, names, and business structures or formats or systems of the franchise owner, all known as a franchisor.. Franchise expert, Joel Libava, offers his ...

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.

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.

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 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 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 a franchise?

A franchise is a business where the owner or franchisor allows a franchisee to access the business knowledge, trademarks, and processes. The franchisee can then sell a service or product under the franchisor’s business name. When starting a franchise, usually the franchisee will pay a start-up fee and annual fees, depending on the set-up.

The stages of the franchisor-franchisee relationship

Your franchisor-franchisee relationship is a long one. Similar to a marriage, it should be built on trust and commitment from both sides of the party. By exploring the different stages of this unique relationship, we can look to determine where along the franchisee journey has the greatest impact on the overall success of the franchise.

3 must-have skills for franchise management

As a franchise owner, your days are spent managing your business and taking a deep overview of your business. At the same time, you utilize your personal skills to maintain good working relationships with your franchisees. While franchising is about growing your business; at its core, franchising is about relationships.

8 tips on how to manage franchisees

Running a franchise with a large network is stressful; that’s no surprise. Although you may demand a lot from your franchisees, with plenty of support and training, most franchisees can find success running their own business. Good franchisors set the tone for communication and management.

In summary

The unique relationship between franchisee and franchisor is crucial to the success of your business. Supporting your franchisees is a delicate balance of being present while also not interfering with the day-to-day operations.

How to work with franchisees?

And finally, document everything you discuss. If you work with many franchisees across a vast area, have similar meetings with your regional managers.

How to treat franchise owners?

Treat your franchise owners like one big family. Whether they’re showering bouquets or bricks, make yourself accessible and address their queries. Besides, since they deal with customers on a regular basis, they might have some good ideas.

What is a franchise?

In franchise systems, a business allows its products and trademarks to be used by another business in exchange for a fee and royalties. The former is known as the franchisor and the latter is known as the franchisee.

What are the two types of franchise relationships?

There are two main kinds of franchise relationships — business format franchising and traditional franchising.

How long should franchisees train?

If you’re conducting on-site training, spend at least a week or so to help the team grasp important concepts. The best training programs are ongoing ones wherein franchisors train store employees for a few days every year.

Why is it important to audit franchises?

Franchisees often see audits as a threat, so it becomes important to explain why they can help their business. Design an audit plan and share them with your franchise owners. You can decide which stores to visit based on objective parameters such as revenue, growth, or footfall.

What are some examples of franchises?

Traditional franchising arrangements are less stringent when it comes to business operations. The best example is gas stations like Shell or Chevron. They aren’t concerned about how you run the gas station as long as you sell their brand of gasoline. Traditional franchises are also seen in soft drinks, automobiles, and spare parts industries.

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 to do if people don't know your business exists?

7. Focus On Customer Retention.

How to get word out about your business?

You'll want to use your marketing budget to get the word out about your business in every way you can, from social media advertising to direct mailers and billboards . You may have the best-run franchise in the world, but if people don't know your business exists, and especially if you don't have a brand name that the world recognizes (such as McDonald's or Burger King), they won't pay you a visit.

What is Forbes Los Angeles?

Forbes Los Angeles Business Council is the foremost growth and networking organization for business owners in Greater Los Angeles. Do I qualify?

Can you cut corners in a franchise?

You can't cut corners in any franchise or in any industry. Even getting the little things right, like finding a consistently friendly receptionist, is very important. Customer reviews on Yelp and other social media sites can make or break a business.

Can you be successful if you buy a franchise?

But obviously, just because you buy a franchise doesn't mean you'll be successful.

Do business owners want to franchise?

Many business owners want to run a franchise, and for good reason. You have your own business, but you're also buying a business system — one that you know works. Instead of starting a business that could bomb in a few months or years, you're buying a business that has worked elsewhere and presumably will work in your community.

Is franchising hard?

We all know that franchising is hard, and it's important to do your due diligence and so on. But still, you don't know what you don't know. Your community may not have enough people that fit the target demographic to support whatever franchise you're interested in. Or maybe there are too many restaurants or automobile service garages or whatever you're thinking of buying.