Why Franchising Demands more than a Great Business Model

Experienced International Development Manager with a demonstrated history of working in the retail industry. Skilled in Negotiation, Business Planning, Customer Service, Coaching, and Sales. Strong Retail professional with a Higher national diploma focused in Hospitality Administration/ Management from University of Derby.

In an exclusive interview with Business Management Review Europe he shared invaluable insights on Franchising requires more than a successful business it demands expert guidance, structured systems, and strategic oversight to scale sustainably and avoid costly missteps.

So, you have a well-established, scalable and profitable business which should be enough to start franchising right? Sadly, it is nowhere as simple or as easy as it might seem from the outside. As a franchisor, you will be licensing your entire business system to others and that means you must get a lot of different things right: legal compliance, operational manuals, brand standards, recruitment of franchisees, training programs, and ongoing support structures. And this is just scratching the surface. For this reason, I would strongly recommend bringing in a franchise consultant to help with all or part of this process as without prior experience, you risk expensive missteps, regulatory violations as well as long term or permanent damage to the business at large. Many businesses think they are ready to franchise, but you’re close (or should be close) to your business and gaining an experienced objective, outside perspective will highlight any operational weaknesses, identify potential franchisee objections and help you to be realistic about how your model will work in new markets.

The Critical Role of Consultants in Building a Scalable Franchise System

Franchising isn’t just duplicating your business; it’s building an entirely new business model which sits over your existing one. A Franchise consultant will assist in developing your franchise disclosure documents, in setting the structure of fees and royalties, define the territory rights and create the legal and operational framework. A good consultant will give frank, experience-based feedback and can assist in creating consistent documented systems and training creating; operations manuals, training guides, brand manuals etc which will help to ensure good standards and consistency as the business expands and your ability to directly control it diminishes.

Consultants are not only useful in assisting in setting up the franchise business, but they can also be invaluable at every stage of your development as a franchisor. From developing marketing strategies, determining positioning and advising on screening processes, franchise consultants can be essential in getting the recruitment right avoiding wasting time and money with unqualified or underfunded franchisees. Consultants can be of real value even for well-established and successful franchise businesses, serving as an inspector of sorts providing a health check on your business identifying any bad habits that have crept in or any areas of vulnerability the business may have developed because of ever-changing legislation.

When making the move to another country; hiring a consultant can give you valuable insight into the localisation that will be necessary both from a franchising and legislative aspect but also from a general operational one. In addition, they will likely have connections with the local associations, banks and other lenders, marketing and PR firms as well which all will help to get traction in a new market.

So, what should you look for in a franchise consultant?

Has the consultant successfully developed franchises like yours? A consultant who mainly does retail franchises may not be the best fit for a financial services franchise or vice versa. How many clients have they helped get to market? Did they grow successfully, or fizzle out?

You will be working closely together for months and will have to disclose every aspect of your business so it is important to make sure that you can trust them and that they are a good cultural fit, they should communicate clearly and promptly, listen and understand your vision while being candid about what needs to be done. Depending on your needs, you want someone who can either, offer a complete development package, with strategic planning, legal frameworks (working with your attorney), produce operations manuals, training programs, franchisee recruitment support etc or specialise in any specific piece you feel you lack the experience in.

A good consultant will walk you through a clear methodology prior to engagement which should start with an initial Feasibility assessment which should identify what areas need work and the likely scope and scale of the work involved. The consultant should also be providing you with the deliverables in writing along with a breakdown of their fee’s.

Fees do vary, and it is hard to determine what is reasonable given that the amount of work involved is dramatically different from case to case. However, there is nothing stopping you getting two or more initial feasibility assessments with different consultants, and a second opinion may be revealing. I would avoid low fees as its often an indicator of low-quality templated work and at the other end of the scale any consultant asking for high upfront payments without clear deliverables.

One last take away is that even the best franchise consultant will not be able to do all the work for you, they can only distil the information you provide them with and provide you with the guidance. Ultimately there is a great deal of work involved in developing and maintaining a franchise and that work needs to be undertaken by someone 100% invested in the business.