CAN I FRANCHISE MY BUSINESS?

Franchize Consultants explain why you need a proper feasibility study

Franchising is a powerful way of expanding a business, but it is not for all businesses. Furthermore, there is not just one form of franchising – there are countless variations in structure that need to come together to make up a franchise system.

It’s no surprise, then, anyone considering franchising needs to work through the options. As Dr Callum Floyd of Franchize Consultants points out, just like building a house, conducting successful surgery, or winning a race, there are logical planning steps required to create a successful franchise model.

What do you need to consider?

Franchising needs to be considered and evaluated in a highly methodical manner, and using specialists. This is for many reasons, not least because:

• Numerous areas and options need to be addressed and in a coordinated fashion;

• Small differences in key areas can make or break potential franchisee and franchisor returns (and therefore future business value);

• Many often prominent businesses that appear franchisable are not;

• Not every company culture and ownership style is suited to managing the franchisor/franchisee relationship;

• A structured franchising assessment is always more considerably involved than the business owners imagine.

All this needs to happen long before marketing the franchise or signing up the first franchisee. If projected returns after realistic costs are not sufficient for all parties to earn a reasonable return, the franchise is not feasible. The time to find this out is before the franchisor is committed (and has spent a lot of money) and franchisees have invested in the business with no hope of success.

Sadly, some franchisors/licensors skip this planning phase, and some advisors are happy to go along with it – thereby increasing the chance that the expectations of both franchisor and the poor franchisees will not be met.

How will it help?

A proper franchising feasibility assessment will not just determine whether a business has franchise potential, but will also enable you to make many important decisions needed going forward: franchise structure; support requirements; fee levels, funding and, not least, training the business owner in how to be a successful franchisor.

For companies considering franchising, a dedicated and comprehensive planning stage, led by a competent consultant specialising in franchising, is needed. ‘At Franchize Consultants we understand the impact of not using a specialist franchise consultant, and not addressing the issues in the right order,’ says Callum.

‘We’ve analysed the background and performance of a lot of franchise companies over the last 34 years, and a lot of would-be franchisors too. We’ve helped a lot of successful franchises start up, and a lot of established franchises restructure to suit changing markets. The key to it all is proper, thorough preparation.

‘If you think that franchising may be appropriate for your business, let us help you investigate the many aspects of structure and management that are needed to make franchising successful. Learn from the mistakes of others and “Do it once, do it right”.’

Advertiser Info

Franchize Consultants

Franchize Consultants

www.franchize.co.nz

Contact Dr Callum Floyd

P 0-9-523 3858 or 021 669 519

callum@franchize.co.nz

Dr Callum Floyd, Franchize Consultants