The franchise industry is booming, but it’s also growing more competitive. Whether your franchise brand is emerging or established, and needs some help growing, working with the right franchise consultant can help you compete and reach your goals. Here are just a few ways how:
Is Franchising Right for You?
Franchising is an efficient and proven way to grow a brand, but it’s not an endeavor you just jump into. You, your team and your brand have to be prepared. A reputable franchise advisor or consultant can help you decide whether or not you’re ready to begin franchising your brand.
One of the tools franchise consultants use to gauge if you’re equipped to begin growing as a franchise is the franchise feasibility study. This study assesses the strengths and weaknesses of your business and determines whether it would be a strong franchise system. The study will evaluate how replicable, sustainable and efficient your systems are. Results will inform you if your concept is timely and if it will be well-received by consumers in multiple markets.
Not every business or entrepreneur is right for franchising. Besides an unproven business model and underdeveloped infrastructure, the entrepreneur leading the business might not be cut out to be the franchisor. As a franchisor, you’ll take on a very different role. A good franchise consultant will determine whether or not franchising is appropriate for your concept.
Develop a Plan
Extensive planning is required for emerging franchisors before the actual franchising campaign even kicks off. A franchise consultant with experience in both franchising and the industry your concept is in can help you develop a plan.
You will need a strategy for building infrastructure, implementing support mechanisms and driving growth, just to name a few. A franchise advisor or consultant can conduct a proof of concept assessment. This assessment will evaluate your current business and determine where you need to improve the foundation, which is required for franchising in the future. A few of the areas typically covered include:
- evaluation of your business
- reputation analysis
- business financial review
- competitive points of difference
- recommendations and findings
Craft Your Franchise Disclosure Document
Your franchise disclosure document (FDD) is arguably the most important document you will develop as a franchisor. It provides potential franchisees with pertinent facts about the ownership opportunity. Among the 23 items in the FDD, potential franchisees will be most interested in:
- Financial performance representation – Item 19
- Fees and estimated initial investment costs – Items 5-7
- Franchisee’s obligations – Item 9
- Territories – Item 12
The FDD must be written strategically and in conjunction with your operations manuals. While franchisors are required by the Federal Trade Commission (FTC) to provide specific information, it will be important to provide more detailed information in your franchise operations manuals.
A franchise consultant with years of experience developing FDD's can help you craft yours to keep potential franchisees interested in your brand while following the rules of the FTC.
Your plan for raising capital is crucial. Too often, emerging franchisors budget only enough to put their systems in place, create training and support manuals, and develop their FDD and franchise agreement. Then, the capital dries up.
In order to effectively grow your brand, you will need at least twice as much capital as the initial start-up costs. In addition to the items mentioned above, you will need money to attract franchisee candidates and grow your support system as your franchise grows. You will also want to secure enough capital for a rainy day fund to get through the slow times.
Whether you’re an emerging or seasoned franchisor, a franchise consultant can help you decide which source of capital is best for your brand:
- Commercial banks
- SBA loans
- Investment banks
- Private equity firms
- Venture capital firms
- Angel investors
Guide You on Growing Your Leadership Team
Franchise consultants should be ready to provide reasons why your brand’s leadership team needs to be strong and knowledgeable. For starters, it’s one of the elements potential franchisees look at when deciding whether they want to invest in your brand. If anyone on your leadership team is perceived as apathetic, not genuine about the brand, unapproachable or unknowledgeable about the industry, your attempts to attract franchisee candidates will fall flat.
A consultant will remind you that the individuals on your leadership team need to be:
- Helpful and supportive with unit level economics
- Well-versed in franchising and the industry in which your concept operates
- Enthusiastic about the brand’s vision
- Able to provide a clear roadmap for growth
Brands with a strong leadership team that can share their energy for the concept with franchisees often have an easier time growing.
What Kind of Franchise Sales Team to Use
Your franchise development team is a key element in attracting franchisee candidates. One of the most important questions a fledgling franchisor has to answer is whether to use an internal or external sales team. There are pros and cons to both. But a franchise consultant can help you decide which is best for you.
For example, you can maintain tighter control of the sales process using an internal employee. If you’re the founder of the company, the training program you develop for your sales team can reflect your own values and guide the team. On the other hand, finding the right talent to staff your internal sales team can be a long process and may be costly. You may have to consider hiring a recruiter, seeking referrals, and screening job candidates. It will also be critical to hire a sales person with franchising experience, since there are legal implications to not understanding how to award a franchise. Working with an external team has a different set of challenges and opportunities. Working with an external sales team frees up time, but you’ll have less control and may have to pay high commission rates.
Social media is a powerful sales engine – if harnessed appropriately. More than 300 million people, from baby boomers to Generation Z, are looking at one or more social media platforms on their smartphones, tablets, laptops and desktop computers. And, more social media apps are developed and launched all the time. Users are a captive audience, many of whom are looking for business ownership opportunities or at least thinking about it.
Brands that are not attempting to sell their franchise opportunity via social media are being left in the dust. However, not every platform is appropriate for conveying your franchise opportunity.
A franchise consultant can help you decide which social media sites will work best for attracting franchisee leads. For example, if you want to target an older demographic, utilizing Facebook is ideal since it’s most frequented by baby boomers and Generation X. However, Facebook is only one of the platforms you’ll want to use to target millennials and Generation Z since they use a multitude of social media sites.
The Versatility of the Franchise Consultant
These are only a handful of ways franchise advisors and consultants can help you grow your brand. The right consultants – with a stellar reputation and experience in the industry across several segments – can help franchisors sidestep common mistakes, better understand an often tricky industry, identify underlying problems and focus on the right goals.
The experienced franchise consultants at Winmark Franchise Partners can help your business reach its full potential with sound guidance. With 30 years of franchising experience and more than 800 franchise owners representing more than 1,250 locations for five brands, Winmark Franchise Partners can help you help grow your brand through sound strategy and expert franchising advice. Contact us here or at (844) 234-8520.