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Developing a Successful Franchise System - blog post image

Developing a Successful Franchise System

Franchise systems are built over years, not over weeks or months. Developing a franchise takes time and effort, as well as money, but the resulting empire of franchises can make the entire process worth your effort. In developing a franchise it is very important that you prove out your franchise concept with several company-owned locations before you start taking on franchisees. The finer tuned your operating model is before you sign on franchisees, the more successful the franchisees will be. The more successful your franchisees are, the easier it is to sell additional franchises.

Considering turning your business into a Franchise? Here are some qualities that your business should have before venturing into the world of Franchising:.

Strong Brand Identity

Having a strong brand is imperative in today’s marketplace for the consumer as well as the potential franchise. If the franchisor's brand name is not bringing the customers in the door potential franchisees may question the value that they would receive by becoming a part of the system. When competing for franchise sales a forgettable trademark may cause potential franchisees to cross you off their list. Believe it or not, potential franchise buyers use shortcuts to narrow their franchise search. A recognizable mark can be a key element to staying in the mind of the investor.

Established Policies and Operating Systems

Also Fundamental in developing a strong franchise system is having clearly documented policies and procedures in place for operating the business. Along with the brand recognition, a tested and successful business model is the reason why potential investors/franchisees would consider purchasing the business model and not starting the business from scratch. You will also need to have an operations manual and training manual to help the Franchisee with the day to day operation of the business. Most of the franchisors have this manual on an online system to not only guide the franchisees but to also protect themselves from potential liability.

Defining Expansion Targets

As a franchisor, you need to have a list of target markets where you will want to put franchisees. Most Franchisors will target the markets that suit their business the best. When expanding you will have to look at what is needed to register your franchise opportunity in each state. Some states require a special FDD (Franchise Disclosure Document) along with a registration fee when offering a franchise within that particular state. It is always best to consult with your franchise attorney on these matters.

Managing the Franchise System

Once you have opened franchises it is important the correct people are in place to oversee the operation and growth of the system as a whole. Having the managers in place to assist the franchisees with the day to day operation of the business is key to the success of the individual franchise owners. Some of the people that have opened the franchise will have limited knowledge about how to run the business that is why they chose to go with a franchise and it is the franchisors job to be sure that all of the policies and procedures are being followed.

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