How to run a franchise business?
You’ve done all your research and picked the right franchise for you, now it’s time to run your business. Your first day of trading will probably be both exciting and pretty scary at the same time! No matter how much preparation you’ve done and how much you know the business inside out, be prepared for things to not always go to plan. This is very normal and should not be off putting, but instead it highlights one of the major benefits of being in a franchise network; the support you have from your franchisor and fellow franchisees.
All good franchisors will have a dedicated team or support manager at hand to guide you safely through your initial period of training. They should be on the other end of a phone if you need it and/or with you for the first few days to help iron out any issues you may come across. And as franchisees were once in the same position as you, they too will be more than happy to help and give you the support and advice you need.
In this step we look at the common mistakes that franchisees make, why the franchise operations manual is important, the support you should receive, how to make sure you don’t run out of cash, motivating your staff and marketing and promoting your business.
A franchisee's top tips for running a successful franchise
Lee Eaton, owner of Signs Express (Manchester) and the 2015 winner of the BFA (British Franchise Association) Franchisee of the Year award, shares the secret to running a successful franchise.
A recent survey, conducted on behalf of the BFA in conjunction with Natwest, revealed that the franchising industry in the UK is stronger than ever. It now contributes £15.1 billion to the UK economy every year – an increase of 46% over the past 10 years and an increase of 10% since 2013.
However, this is by no means an industry where you can sit on your laurels. With more people joining the franchising industry every year, you need to ensure that you choose the right business for you and you have the right mentality to succeed.
With over ten years’ experience running a successful franchise, here are a few of the tricks I have learned that have helped me to develop a business worthy of recognition.
Tip 1 - Join an exciting industry
Choosing the right industry to join when researching possible franchises can be extremely difficult, even overwhelming – especially if you have spent your entire career in a specific environment.
Do not fear, all of the best franchisors will offer you the training that you need to properly understand the industry you have chosen to enter, but most importantly, the industry needs to excite you!
After your discovery day, ask to visit some existing franchisees to see what a day in their life looks like; what support they receive, their projections for the future and what the industry feels like. This should give you a feel for whether it is the business for you.
Your happiness as owner of the business will have a ripple effect on the rest of the team who work for you. So choosing an industry that not only interests you, but makes you happy and this will encourage your employees to share your passion.
Tip 2 - A happy team = happy clients
Richard Branson famously said: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Giving employees the tools to improve their jobs and skills, as well as showing them that they are valued members of the team through encouragement and praise, will give them a reason to stay with you. Plus, happy employees will automatically spread this to your clients through excellent customer service.
Great employees will support you in your business decisions and will tell you when you are making a questionable decision. Keeping the entire team in the loop and trusting others with responsibilities will allow you to focus on the crucial things and your employees will take care of the rest.
As your business grows and your team expands, you need to be increasingly aware of employment law and best practices with regards to HR. Well-established franchisors will have plenty of experience to draw upon and some will even have an HR expert on board to help you in any way that they can.
Tip 3 - Fail to prepare, prepare to fail
This is important for all aspects of work and life really. If you take the time to get it right from the start, the end result will follow.
We have adopted a saying at Signs Express which is, “measure twice, cut once,” a perfect motto to follow in every aspect of your business life, no matter the industry.
Preparing a business and preparing yourself are two completely different things; you need to be ready to work hard, put in the long hours and hit a few speed bumps along the way, especially at the start. With the right preparation and the support from HQ, the strain of starting up a business can be reduced.
Tip 4 - Go the extra mile
It might seem a bit cliché but every client is of equal importance, regardless of how big or small the job is.
Every client deserves to have the knowledge that they’ve come to the right place. This experience should be portrayed by the team from start to finish and keeping the client up-to-date throughout the whole buying process is a must. This level of feedback and information to the client goes a long way to help gain repeat business and confidence in the brand.
Indeed, some of our largest orders have come around as a result of one small job!
Tip 5 - You are not alone
The benefit of being a part of a franchise is that you have a whole pool of knowledge and experience from other franchisees and the franchisor in order to handle national, larger and more complex projects. We found this especially useful in the early years when we lacked experience.
Being a part of a well-established franchise will also allow you to seem bigger than just one branch, which helps to quote for work and to complete multiple national works for big blue-chip companies.
Tip 6 - Work on facts, not assumptions
Don’t assume business is going to come to you because you have taken on a franchise. Being part of a franchise can help, but ultimately it is your business and you will always be responsible for its development and growth.
Ask yourself if you are willing to work long hours and make tough decisions to establish your business and to ensure that it thrives.
The Franchise Operations Manual
The contractual relationship between franchisor and franchisee is formalised in the Franchise Agreement. While the Franchise Agreement sets out the initial and ongoing requirements of the contractual relationship and the obligations of both parties, it doesn’t explain in detail, how the franchisor and the franchisee must fulfil their obligations. This is the role of the Operations Manual.
The importance of the Manual’s role cannot be over-stated because, together with a comprehensive training programme and ongoing support, this is how the franchisor will transfer their know-how and embed the business system. A comprehensive, well-constructed Operations Manual should evolve from first edition into a powerful management tool to help the franchisee establish and grow their business, renew the term, or prepare it for sale.
The franchisor must provide access to the Operations Manual on signing the Agreement. However, many franchisors introduce The Manual to the new franchisee during induction training so that they become fully familiar with its purpose, how it is organised and how the new business will be operated, audited, and improved. Initially, the franchisee will use the processes in The Manual to set up, launch and establish their new business over the coming 12 months. Actions will need to be completed, as specified, and approvals sought. Therefore, The Manual should provide the franchisee with detailed procedures so that the business model can be replicated successfully from the outset.
The Manual must be up-to-date, relevant and reflect amendments, modification made to the system, new products or services introduced. However, should a dispute arise, the Franchise Agreement takes precedence. The latest edition of The Manual should be easily accessible to the franchisee’s team for reference whenever needed for the duration of the contract.
In franchising, intellectual property (IP) consists of many different aspects, from trademarks (brand name and logo) through to products, services and processes that differentiate the business offer. The Operations Manual is the tangible way of protecting the franchisor’s IP. Because it comprises secret and substantive information about the franchisor’s working methods and practices that are not disclosed to the public, great care must be taken to ensure that no part of The Manual falls into the hands of any unauthorised person. The Manual is protected by copyright and access will be granted only with the franchisor’s permission.
Operating to processes and procedures may seem onerous – and not a little daunting – if you don’t have much or any management experience or some of the skills required. However, when supported with good systems and the sound advice and guidance of the franchisor’s professional personnel, you should be able to deliver excellent value to your customers and gain competitive advantage in your territory.
A competitive advantage helps the business distinguish itself from its competitors and allows it to charge higher prices than its competitors, build brand loyalty, and attract a wider audience. It’s what makes a customer choose one business over another. Therefore, by understanding, and promoting your franchise strategically and skilfully, you can increase market share.
Know-How & Business System
Know-How is defined as confidentially or closely held information. This will be in the form of technical data, formulas, standards, technical information, specifications, processes, methods, handbooks, raw materials, as well as all information, knowledge, assistance, trade practices and secrets – and improvements. Specifically in a franchise, these are communicated by the franchisor to the franchisee via the Operations Manual.
The Business System is how the franchisee will meet customer expectations by implementing a systematic approach to analysing, measuring, comparing, and testing all the possibilities of what the customer wants, or doesn’t want. A strong Business System, capable of surviving the highs and lows of a business cycle, is at the heart of any high performing franchise model and should provide the franchisee with a process to fix their processes – e.g. by performing internal or external audits.
Implementation of a good Business System will help you to reduce costs and prevent the erosion of profits. When applied to safety, hygiene, quality, or getting the job done in a timely manner, this will give you effective, efficient, and repeatable results. It should also provide you with a clear plan to develop the business and improve top-line performance.
For example, the aim of a sound recruitment system is to provide suitable training and opportunities to all franchise team members so they can complete their work more efficiently and effectively. Franchisees also seek to harness their employees’ ideas and creativity and, in the process, increase their personal engagement. Having a procedure in place allows you to integrate new team members swiftly and makes it easy for them to see their role within the franchise and suggest new ideas that can improve the business.
An established franchisor’s Know-How will have been accumulated over many years – much of it learned the hard way. The way in which the complete Business System works, should be rigorously tried, and tested – and improved. Mistakes will have been made – and corrected – so that the franchisee can benefit from their first day to their last.
Standard Operating Procedures
Most likely, the franchisor’s Know-How and Business System will be presented in the Operations Manual as a structured set of Standard Operating Procedures – commonly known as SOPs. SOPs capture organisational knowledge for all core processes that are repeatable. The franchisor’s objective, then, is to ensure that the franchisee gets a reliable result – first time, every time. To quote Aristotle: "We are what we repeatedly do. Excellence, then, is not an act, but a habit".
An SOP needs to be flexible and take what is good and working well – and improve upon it. When replicated across a franchisee network, this results in three powerful interdependent pillars of a franchise:
- Consistency; and
Quality is everything that adds up to providing complete customer satisfaction so that the franchisee can build on the franchisor’s desire to be the customer’s No.1 Choice – e.g. extensive choice of locations, longer opening hours, highly trained personnel. It is superior quality, in terms of knowledge, selling skills and an all-round professionalism, which are essential elements in communicating the franchisor’s vision and brand values. Ultimately, this will lead to more, loyal customers who become great brand advocates.
Consistency needs to be applied to every process – i.e. from the people the franchisee recruits, the training they provide, to the services and/or products that they sell. However, these processes will need to be sufficiently flexible to cope with potential external economic, political, legal, demographic, social, competitive, global, and technological influences, any of which can affect the smooth running of a business. A perfect example of multiple influences is the Covid-19 pandemic.
Regulatory compliance and compliance with the franchisor’s requirements and policies form the bedrock of a franchise. The franchisee’s obligations – and those of the franchisor – will be set out in the Terms and Conditions of the Franchise Agreement. However, it is the job of the Standard Operating Procedures to underpin these Terms and Conditions with the operational detail necessary for compliance. Non-compliance can be costly when the consequences are financial penalties, court costs, suspension of services. For example, a serious case of food poisoning in a fast-food franchise could lead to a fine or closure of the business. It would also damage the brand.
An operational process is an organised set of activities or tasks that produces a specific service or product and, usually, addresses what, when, why, who, and how questions.
- What is the process?
- When is this required?
- Why is it necessary – i.e. outcomes, results and payoffs?
- Who is responsible for meeting the franchisor’s minimum operating requirements?
- What will happen if the franchisee doesn’t conform to the specification?
- How will the process be performed, checked, and measured?
- What tools and resources are available to assist the activities or tasks?
The process should be described using logical, easy to follow steps. These steps will be tracked as needed, revised continuously – and improved. This is the recipe for efficiency, growth, and profit so the business can scale forward.
Franchises are service led and highly customer focused. A great customer journey doesn’t happen by accident. Customers are at the heart of every business; therefore, the franchisee will need to learn how to build long-term relationships with their customers and develop new ones. It is essential that a relationship of trust is built with every customer, to earn their loyalty so that, ultimately, customers become great brand ambassadors.
Let’s examine the processes involved in this simplified, fictitious example. A growing bakery franchise has 15 stores in prime High Street locations. Customers love the irresistible smell of fresh coffee and newly baked bread as they enter the spotlessly clean bakery. In the window display, there’s a wonderful variety of delicious cakes and pastries at competitive prices to which passers-by are temptingly drawn. At point of sale, there are several special offers – including ‘Loaf of the Day’, ‘Cake of the Day’ and ‘Coffee Flavour of the Week’. Collectively, the chefs across the franchise network bake thousands of loaves, cakes, and pastries every day to the same recipe. There are 25 core recipes.
The Franchise Manager always orders top quality ingredients from the same reliable quality-checked suppliers approved by the franchisor. It’s vital that deliveries of ingredients arrive at each franchise on time. Chefs follow the same process measuring out exact quantities and using the same method for a recipe so that each loaf, cake, or pastry will be baked to the same standard of excellence as those baked the day before – and will be the day after. Every barista ensures that the roasted Italian coffee they serve is freshly ground, perfectly tamped and the cappuccino milk is heated to the exact temperature necessary to obtain the right quantity and density of froth. All team members understand that any wastage will erode the bakery’s profits.
The staff, in their smart, pressed workwear and name badges, greet each customer warmly with a genuine welcoming smile and a cheery ‘good morning / good afternoon’ remembering the names of their regulars – always. The counter staff are skilled at selling the bakery’s products and many have been there since the franchise was launched five years ago. They know the ingredients of every product – which ones are gluten free, contain lactose, or nuts. They cannot afford to get it wrong in case a customer has an allergy. Staff often manage to persuade the customer to try a little something extra upselling the value of the sale.
Regardless of where a bakery is located, it’s instantly recognisable. Customers feel comfortable and safe in the familiar pastel co-ordinated surroundings. They receive the same welcome, enjoy the same high-quality products, sold by a small friendly team who have created a happy and harmonious environment. Customers can choose how they like to pay and leave the bakery looking forward their next visit, purchases placed carefully in eco-friendly carrier bags with the bakery’s corporate logo, local phone number and longer than average opening times advertised prominently. At the end of the day, all equipment is stripped down, utensils cleaned, the shop and bakery floors and surfaces scrubbed and sanitised ready for opening the next day.
All new customer contact details are added to the bakery’s email list and each bakery enjoys a strong core of loyal customers who need to be – and like being – nurtured. Customers enjoy their regular visits, but they also love receiving the monthly newsletter introducing special offers and recipes with the occasional new product to try, free of charge, on their next visit. Loyal customers recommend the bakery to all their friends. So, the bakery acquires more loyal customers to serve.
Let’s take a moment to consider some of the processes that the franchisor would need to cover in the Operations Manual.
- Bakery Establishment – e.g. legal entity, registrations, location, site selection, acquisition, design, fit out, equipment for shop and back of house baking
- HR & Recruitment – e.g. team job roles and descriptions, advertising, interviewing, selection, onboarding (Induction), people management
- Initial, Development & Refresher Training – e.g. customer service, bakery, coffee preparation, selling and management skills
- Food & Beverage – e.g. recipes for bread, cakes, pastries, beverages
- Environment – e.g. ambiance, team presentation, workwear, cleanliness, maintenance
- Marketing & Promotion – e.g. advertising & PR, launch programme, brand guidelines, point of sale materials, merchandising, data capture and protection, communications
- Health, Safety & Hygiene – e.g. food safety, customer, employee and contractor safety
- Supply Chain – e.g. approved suppliers, ordering, checking, safe storage,
- Quality Control – e.g. product and batch testing, internal and external audits
- IT Systems – e.g. Till system, payment options, financial management, general administration
When you add all the daily, weekly, monthly, quarterly, and annual routines that the franchisee and the team will need to perform, it follows that to be useful, the processes that need to be described in the Operations Manual will be substantial.
Due Diligence & The Manual
During the process of due diligence – i.e. homework that you need to conduct before signing the Franchise Agreement – it makes sense to gather as much intelligence as you can about the Operations Manual.
The Terms and Conditions of the Franchise Agreement state that the franchisee’s obligations will be carried out ‘as described in The Manual’. These references should dovetail with the Standard Operating Procedures set out in The Manual whose job it should be to underpin every regulation, rule, and policy as a minimum requirement.
Because franchisees are required to conduct their business strictly in accordance with The Manual, it would seem entirely reasonable that an intending franchisee would be given sufficient opportunity to study The Manual and determine, for themselves, how useful it will be in the day-to-day operation of the franchise in which they may invest. However, a franchisor is not obliged to give you access to The Manual until you have signed the Franchise Agreement. Also, there may not be sufficient time to look through The Manual in any depth – even when you have signed an Intending Franchisee Confidentiality Agreement.
One reason is that the Operations Manual is most likely to be published in an electronic format, rather than the weighty tomes that often remain on a shelf gathering dust. Today, the latest edition of The Manual may only be accessed via a password-protected franchisee portal.
A franchisee portal is a specially designed website that serves as the single point of access for information. It can also be considered a library of personalised and categorised content. A franchisee portal assists in search navigation, personalisation, notification, and information integration. As a result, The Manual becomes part of a highly interactive system often providing features such as task management, collaboration, business intelligence and application integration.
Other franchisors may keep their Manual in cloud-based systems such as Dropbox or Microsoft Sharepoint. These also require a password for access. Although a good, simple alternative to the franchisee portal, this may be more limited in scope and functionality.
Access to The Manual will be provided for the duration of the term of the agreement and is for the exclusive use by the Franchise Owner/Manager and their staff. However, it remains the sole and exclusive property of the franchisor. When a team member leaves, or when the Agreement is terminated, password access will be withdrawn immediately.
An electronic version of the Operations Manual is easy for the franchisee to access and refer to, as part of day-to-day operations. It is easy for the franchisor to keep up to date in a timely manner – i.e. when updates are necessary, a modification is made or a new product/service is introduced to the Business System.
This is a summary of the classic building blocks of a good Operations Manual:
- People: How to get the business off to a flying start and deliver the perfect customer experience – first time, every time – through a handpicked, motivated Team.
- Sales & Marketing: How to present the brand in accordance with brand guidelines and promote it to generate more business through local marketing and social media.
- Operations & Management: How to manage customers, the workplace and achieve a work-home life balance.
- Growth & Profit: How to keep finances on track, grow the business and develop new skills, manage renewal, and prepare the business for sale.
- Regardless of its format, the Operations Manual must be fit for purpose – i.e. up-to-date
- Relevant (underpins The Agreement)
- Detailed (as described in this article)
- Well written and easy to understand
- Readable (without waffle and jargon)
- Well laid out (a simple page design)
- Easy to navigate (fully searchable)
When you meet the franchisor, you should obtain satisfactory answers to these questions:
- What is the format of The Manual?
- How and when do I obtain access to it?
- How is The Manual organised?
- Can I see a Table of Contents – and / or a sample Section
- When was it last updated?
- Is there a formal process for updating it?
- Will I/my team have an opportunity to suggest improvements?
Note: If you intend to buy a franchise which has not yet launched and is proving / piloting the concept over 12 to 18 months, some franchise systems may not be fully embedded and, therefore, not fully documented. In which case, you have a unique opportunity to become involved in the evolution of the Business System and the Operations Manual. Armed with this knowledge, you should now have a good perspective on what makes The Manual a powerful quality management tool that can benefit new franchisees for when the franchise is launched officially.
Also, when you talk to franchisees, as part of your due diligence, take the opportunity to ask them about The Manual:
- Was The Manual helpful when they established their business?
- Do they still refer to The Manual – if not, why not?
- Does it help them grow their business?
- Are they empowered to suggest improvements towards Best Practice?
- Has the franchisor appointed a group of franchisees to review The Manual and feed back the network’s comments?
Only when you know what the Operations Manual contains, how it is supported and have the answers to these questions, can you decide whether The Manual will be sufficiently effective to establish, run and grow your new business.
The Future for The Manual
As people have less time and everything becomes more digital, changes faster, and becomes more complex, franchisors will employ faster, leaner, knowledge-sharing solutions. Already, technology is making procedures more digital and accessible and the exchange of information more effective and efficient. For example, QR (Quick Response) codes can be read and understood by mobile devices. Therefore, in the coming years, the way in which franchisors engage with their franchise networks will become more innovative, flexible, and instant. Franchisees and their teams, whatever language they speak and wherever they are in the world, will have the information they need at their fingertips as soon as they need it, not as a traditional Operations Manual. No longer will they need to waste valuable time searching manually for an answer.
About the Author
Penny Hopkinson, Manual Writers has over 35 years' experience of writing manuals. Penny advises and coaches on how best to develop and publish an Operations Manual to impose and replicate uniformity and conformity across a developing franchise, licence or branch Network. To find out more, please contact Penny on 07956 315750 or email@example.com for a no-obligation strategy call.
Having established that the franchise is reputable, and it is a business you see yourself being part of, you then need to examine the strengths and weaknesses of their franchise operation.
You need to be confident that they will provide you with the required support you need at the launch of your franchise business and on an ongoing basis. This is central to the success of your franchise.
If you receive no or little support, your business will be on a downward spiral from the start. You will have no one to turn to when problems arise and will continue to make the same errors time after time.
What support will a good franchisor give you?
- Help whenever you need it: A good franchise company will be available 24/7 to help you with any problems you have.
- Support from Day 1: They will be there throughout your launch and will continue to provide you with the dedicated support you need on an ongoing basis. They should provide you with a detailed operations manual that outlines all areas of running your business.
- Visits to your premises: They will have support teams in place to deal with your queries and will regularly visit you at your workplace to make sure that you are coping and to make sure that the business is being run efficiently.
- Opportunities to network: Good franchisors will hold an annual conference where franchisees can get together to discuss any issues or ideas they have, and to hear from the franchisor on their plans to take the business forward.
- Assistance with accreditations: The franchisor should also assist with making sure that you have the correct insurance for your business as well as any certificates and accreditations you may require e.g. health and safety.
- Access to current franchisees: Ask other franchisees about the what support they receive and what changes they would make. This is the best way to get an insight into the business.
You need to be happy with the results of all your research before you should consider entering into an agreement with the franchisor.
Questions to ask the franchisor
- Ask the franchisor and franchisees about implementing change and what support you would receive e.g. new computer systems, rebranding, new product development etc.
- How do they support your marketing activities? Who does what and what is provided?
- Do they offer cover if you go on vacation? What happens if you are ill, what support do they provide?
- What support would you receive to help you with staff recruitment and training? Do they train your staff for you or train you to train your staff? Or do they not offer any training support?
One of the most misused words in the English language, in franchising, is ‘support’.
This article is aimed at both franchisor and franchisee. For the former, it outlines what could be done and should be done; for the latter, it describes levels of involvement that may be important to you.
The dictionary has a number of definitions – I picked out the verb ‘to support’ and saw that it was defined as ‘to help someone emotionally or in a practical way.’
In franchising, I think you could say it should read ‘to help someone emotionally AND in a practical way when establishing, developing and eventually exiting from a franchise business operation.‘
A franchisee reading a Prospectus, or the Disclosure Documentation will see that word support used a number of times and reasonably expect it to be all-encompassing, whereas the franchisor may see their involvement as being fairly well engaged at the beginning but gradually ceasing over time.
Franchisors often talk about the lifespan of a franchisee as being that of child, toddler, teenager, adult, and senior citizen. When we think about it in life’s normal course of events and in any of those 5 situations, we all need support from someone somewhere, but in a different form. As a child, one needs to be completely handheld, nurtured, and encouraged. As a toddler, one looks to have one’s boundaries extended and somebody there to guide us. As a teenager, we look for certain freedom but within a safety net, that means we do not become damaged or damage the family unit. As an adult support is often more about emotional connection or financial in today’s world where young people cannot get on their feet until they are in their thirties, and in senior citizen status it is all about supporting a person to wind down gradually and maintain their contribution and dignity to the end. At any point on the lifespan, we all need support and from experience, that life-cycle support can also be applied to franchising.
In franchising, support means providing:
- A listening ear
- Technical advice
- Business building tools and marketing collateral
- Financial guidance
- New innovations, ideas, and direction
- Constant encouragement and motivation
- New products or services to enable the franchisee to remain competitive
- A strong communication network within which to thrive
- Recognition & Reward
- Supply chain negotiation and relationship management
- Continued training to improve all aspects of a person’s business capability
- Customer service policies and guidance
I very much doubt that this list is exhaustive, but it is plentiful!
A would-be franchisee should be able to ask the franchisor and operating franchisees in the network what their experience of giving and receiving support looks like in theory and in reality.
A franchisee looks for support, not just from the franchisor, but from a wider network. Here I am thinking for example of support from their family when they are setting the business up and the going is tough, from the bank all the way through the business cycle, from fellow franchisees who are established and doing well, from suppliers and from customers.
No man is an island – we all interconnect, and we all need each other, and support comes in many ways.
So, whether you are a potential or operating franchisor or a potential or operating franchisee, this franchise support discussion should give food for thought.
Now, I’m off to support my football team….. oh dear, it is Norwich City! Never mind, there is always next season!
Nick Williams is an experienced national and international franchise development consultant who has worked in the UK franchise industry for over 22 years. Nick and his team of franchise specialists at Ashtons have assisted hundreds of business to expand and grow through franchising since the inception of the business in 1981. We have worked with companies of all sizes from all sectors. Ask Nick a question / get in touch
Ongoing support for business growth
Rainbow International discusses how ongoing support from a franchisor can help you to build a successful business.
Once you’ve finished your initial training and opened your franchise for business, you should be well-prepared for the initial set up of your business and getting to grips with the systems and processes. However, what happens when you come across something new or a difficult situation? A good franchisor should be available for you to ask questions and solve problems 24/7 or at least during your working hours.
You should be confident that your chosen franchisor will offer an effective ongoing support programme to help you build a successful business. In the early days, you are likely to find areas you’re not too sure about or can’t quite remember from the training so having a franchisor who is contactable at all times will help you to make sure that you continue on the right path.
Effective business plan
Before moving on to operate your business, you will have drawn up a business plan with realistic targets and what you can hope to achieve in the next 1-5 years. Reviewing this plan and checking your progress will help you to measure your success and keep you on track with hitting and exceeding targets.
The franchisor should regularly invite you to review your plan with them to help you stay on track and keep your business profitable and successful. The business plan should take on board your strengths, weaknesses and skillsets and the franchisor should work with you to improve areas of weakness and help you to develop your skills.
As part of the ongoing support programme at Rainbow International, our franchisees develop a 100-day plan to ensure that their businesses launch smoothly and successfully. The plan fits around franchisees’ existing skills and experience to ensure that they know exactly what they need to achieve in the first few months of their business and beyond. Franchisees work alongside Head Office to implement and regularly review the plan to ensure that goals are met and exceeded.
Field support visits during which the franchisor or a member of the support team visits you on-site are an integral part of any franchise support programme. This provides an opportunity for the franchisor to observe how the franchise is being run whilst allowing them to coach you in the field on ways to improve your business operations for success.
These visits are likely to be regular during your first year of business and the intervals between them will become more spaced out as you develop and grow. Field support is a great way for you to gain more practical knowledge of the business. As much as you learn in the training, you still find that you need support in certain elements of the business.
At Rainbow International, franchisees are supported in the field by Regional Support Managers who are on-hand to assist with daily challenges faced by franchisees. We work closely together with franchisees to ensure that their businesses remain successful and to keep our systems and processes consistent throughout our network.
Technological or business developments
As part of the support from your franchisor, they should keep you updated with any changes in the technology or software you use and the overall business. If the franchisor decides to offer a new product or service, they should provide you with the training and equipment you need to offer it within your business.
Part of being a business owner is to ensure that your business stays profitable and stays ahead of market conditions and this means updating your systems, processes, products and services. Part of being in a franchise network is that most of this is done for you!
Most franchisors hold annual conferences, regional meetings and franchisee forums to ensure that you know about any updates in the business and so that you remain up to speed with the way things are done. This is beneficial for both you and the franchisor – you’re able to compete with other businesses in your local area and your fellow franchisees are performing at the same level, thus the brand is protected for all franchisees. The franchisor ensures that their business continues to be updated and the whole network is operating on the same level.
Staff training and recruitment
In addition to training franchisees in running the business and the products and services you sell, your franchisor should also offer training to your employees. They will be your day to day support within the business so it is essential that they are educated on the values of the business, especially if they are customer facing! Many franchisors offer to train your staff as they are also brand representatives and it is important that they know how the business works.
Tech support – product support
As part of your ongoing support, franchisors should be available for tech and product support. If you have a question about how to carry out one of your services, they should be on-hand for advice and guidance as you complete the work.
You may have a customer who has a problem or query about a product or service and, one of the biggest advantages of being part of a franchise network is that you can call the support team for help whenever you need it and have your questions answered in real time. This also ensure that your customers are not kept waiting whilst you call on support from head office.
For example, at Rainbow International, we support our franchisees with the equipment they use. We can advise on which piece of equipment is the best to use in any given situation to ensure that damage is kept to a minimum.
Ongoing support is essential to the success of your franchise and will aid you in developing and growing your business.
How to make sure you don’t run out of cash!
In this article, Chris Robert from the Chantry Group looks at how to make sure you don't run out of cash when running your franchise.
Wanting your own business is the dream for many people but the reality of the situation can mean you end up confused and alone, responsible for everything from dealing with difficult staff personnel matters to issuing and chasing invoices.
You really do need to be a ‘Jack of all trades’ and that isn’t easy if you don’t have the appropriate experience, training and /or support. That’s why more and more people are turning to Franchising, because if you choose a good Franchise, you will get plenty of training, support and of course you will actually achieve your goal of being ‘The Boss’ of your very own business.
Make use of all the tools given to you
The reality is that you will be given all the tools you need to run a successful business and providing you follow the model and put all your energy into the process you are likely to be successful. That is as long as you don’t run out of cash!
Only you can control this so don’t leave it to chance. Be aware of what is happening in your business. How much money you have and how much money you need. It is your job to find a way to ‘balance the books’.
So if you are new or relatively new in business, here are some tips and hints to help you,
Let’s start with some fundamental points: You are about to set off on a business journey. You need to be clear in your mind what your destination is and then plan your route accordingly. So what are your business objectives and how are you going to achieve them i.e. you need to set out your business strategy.
Create a financial plan
The next step is to create a financial plan around this strategy. Your financial plan should have three main parts to it:
- The projected profit and loss account, as the name suggests, tells you whether you are likely to make a profit or a loss and therefore whether it’s worthwhile doing what you want to do the way you are planning to do it!
- The Cash Flow Forecast tells you how much cash you will need, each month, in order to stay on course and whether therefore you can actually afford to do what you are planning to do.
- The projected Balance Sheet tells you in advance what your business will look like in the future in terms of its assets and liabilities, i.e. what your business owes and what your business owns.
Check on track
Having now properly planned and started your business journey you then need to make sure you are staying ‘on track’. You cannot really manage your business performance properly unless you regularly measure how well you are doing.
This is the next fundamental point. You need to monitor your business performance as you go and take the necessary corrective actions to ensure profitability and even more importantly that you don’t run out of cash.
Using your bookkeeping system to create monthly (or at least quarterly) management accounts will help you to do this. You can then look at trends to spot problems before they become too serious (e.g. negotiate longer credit terms or increase an overdraft facility).
Trend analysis will also help you to change your plans or route along the way because you will soon learn that your business will be influenced by many outside factors which you will not be able to control. Your plan, therefore, should be flexible and not ‘cast in stone’.
So from a positive perspective be prepared to take advantage of any unexpected opportunities that crop up, e.g. a competitor closing down or a sudden upturn in the economy. However make sure you have worked through the ‘cash’ consequences of your actions as there can be a big difference between ‘potential profit’ and ‘actual cash’.
So, in conclusion, what are we saying? You want to be ‘The Boss’ and to run your own business and you want to be successful. Well you will be, if you start with the right ‘mind-set’ and remember the following:
- Invest in some appropriate training (such as our ‘Understanding Business Finance and Accounts Course’) to ensure you have the skills you need.
- Decide on your business objectives and plan your strategy.
- Build your business and financial plan around this.
- Don’t be a ‘Busy Fool’! – Make sure the business you do is profitable.
- Measure and monitor your progress against your plan.
- Always remember: ‘Turnover Is Vanity, Profit Is Sanity and Cash Is Reality’.
- So now, when or if you have your own business and you are ‘The Boss’ you now know what to do!
Common mistakes franchisees make in initial period of trading
In this artilcle, Driver Hire looks at the most common mistakes that franchisees make during the initial period of trading and outlines how to avoid them.
So you’ve taken the plunge and decided to run your own business. You’ve written your business plan and thought it all through, crossing the t’s and dotting the i’s. Now it’s time to open your doors, sell your products or services and make some money.
Sounds simple really, but once you officially open for business it’s easy to trip up in the early days and make a few of the following common mistakes. If you have chosen the franchise route the training your franchisor provides should help to better prepare you for these pitfalls. Nevertheless it’s essentially up to you to avoid veering off track and listen to the experience of those around you. A successful franchisor has learnt over time what works and what doesn’t.
Concentrate on the right things
In all the excitement of getting set up in your home office or moving into new premises such as a serviced office or a retail unit, it’s easy to get distracted by the colour of the flooring, how the office looks and what technology to get in.
This is all important but if you’re not making sales you’re not going to be able to pay for it all.
In the early days of trading you have to keep asking yourself, “Is this a big detail and does it really matter right now?” Remember to stick to the business basics on a daily basis. For a Driver Hire franchisee running a recruitment business that’s: find candidates, find clients with vacancies and put them together.
Focus on your strengths, don’t panic about your weaknesses
There’s a lot to learn when running a business for the first time especially if it’s within an industry that you’re not accustomed to.
A large proportion of Driver Hire franchisees have never worked in either the recruitment or logistics industry prior to starting but they’ve identified their strengths that carry across to suit the type of business they’ll be running.
Concentrate on your strengths; you’ll learn to deal with the tasks you’re not so hot on, (either you’ll simply have to or you’ll be able to employ someone whose own strengths and weaknesses complement yours).
When you’re ‘forced’ to learn something because your business is dependent on it you’ll be surprised what you can take on board and how you can soon become the expert.
We all mismanage our time every so often. To help overcome this some people will only check their emails once a day. Or when a specific period of time is required to concentrate on a task in hand they’ll ‘close the door’ as it were and switch off their phones. You need to decide what works for you and be bold enough to implement it.
When running your own venture it’s also imperative that you don’t spend too much time in the business and that you allocate time to work on the business. Give yourself time to step back and look at what you’re doing and where you’re going. This is sometimes called the ‘helicopter’ approach and is important when looking to identify new opportunities, assessing current operations and setting longer term goals.
Attempting to do everything
As a new business owner / franchisee you’re probably buzzing with new ideas and ways to implement things. Your franchisor might offer a plethora of products or services for you to sell. You can’t do everything from the outset and therefore you need to concentrate on your core business objectives first.
At Driver Hire the core business is providing temporary staff working in the transport and logistics sector. Other revenue streams include permanent recruitment, classroom training for the Driver Certificate of Professional Competence, online training modules relevant to the industry and a driving licence checking service linked with the DVLA.
To try to offer all these from day one would be a mistake unless you were buying a resale opportunity that came with a team of staff already well briefed and skilled to sell and service these add on products. In particular with a brand new business or start-up opportunity you need to grow your foundations first. Remember use your strengths.
Recruiting or investing in your own team of staff
It’s understandable that if you’re starting a business from scratch you may not initially be able to employ a team to help you. It might be that you intend to run a business on your own, at a level you feel comfortable with, and therefore knowingly place a cap on your growth potential.
If you have the entrepreneurial spirit you’ll want to cultivate and grow your business and this will mean employing staff and investing in them.
The preferred number of staff (in the beginning) to work in a Driver Hire franchise is three, including the franchisee. This means when you do let yourself or one of your team members take a holiday – we all need a break! – there will still be two left in the office to keep the business running or at least ticking over until you’re at full capacity again. Some business owners in their initial period of training will claim that they can’t afford to employ staff. This means they will continue to run their business but will risk not developing it. When it comes to taking staff on board - you sometimes can’t afford not to.
Driver Hire’s Hereford and Worcester Franchisees Vance and Sue Parsons started out on their own when they initially bought the business. Sensibly in their business planning stage they made the decision that once they reached a certain level of trading they would employ an apprentice to help take them to the next level. This enabled Vance to view his business strategically and plan new initiatives to meet his objectives. In 2015 they entered the Enterprising Worcestershire business awards and collected the trophy for ‘Business Growth’.
In and amongst researching who to target, making the essential sales calls and visits, implementing your marketing and communications plan, managing staff and what seems like a list as long as your arm...don’t forget to collect the money you’re owed.
‘Cash is King’ and although it seems an obvious task it can quite often be forgotten or pushed back to another day that never seems to arrive.
To help manage this you need to get your daily, weekly and monthly routine in order. Get some processes in place. If you’re not on your own, assign responsibility and ownership of those tasks that simply can’t be missed.
Try and get your plans and housekeeping in order before you open the doors to your business and decide your plan of action from day one so that when you actually start, you are actually doing, not planning to do. Learn as much as possible from those that have been in a similar position to you.
A franchised business enables you to speak to fellow franchisees that are in the same business as you but not in competition with you. They will truly understand the common mistakes relevant to your industry and the franchisor’s support network can prove invaluable in those early days.
Top tips for promoting your franchise business
In this article, Coconut Creatives, award-winning marketing company, has provided a useful list of top tips for franchisees to help promote their business.
One of the main advantages of buying a franchise business is the backup, support and brand name you receive for your investment. Although your franchise brand may be well known, unless you’re running a McDonald’s franchise, you will still need to market your franchise in your local area to let people know who you are and what you do. Marketing will help you push your business and make sure those all-important customers keep coming through the doors.
Marketing encompasses a range of activities that must be undertaken to promote your business. The type and number of activities you undertake will vary depending on your market, business and product or service. Here are just a few of our top tips for promoting your franchise business.
Understand your customers
The first step in any marketing strategy is to get to know who your best customer are, what they like and their habits, and target similar people. 15% of your best customers account for 55-70% of your total sales.
That’s a huge proportion of your sales and you need to make sure that not only are these customers kept happy but that the 15% continues to grow. Once you have defined your target audience, you can ensure that you’re not spending time and money on marketing activities that do not communicate the right message to the right people.
What does your franchisor have to offer?
Your franchisor has spent years refining their business model and sharing it with others to help them build and run successful businesses.
Everything they know about the business is written down in the operations manual which should also have a marketing section. It is important that you keep referring back to this as many of the methods outlined can be translated to your own local area.
The franchisor is also there to help you if you’re struggling with the marketing for your business. Once you’ve drawn up a marketing plan, send it to them to see if they have anything they can add or give you any advice. Make the most of the marketing team at Head Office and the materials they produce to support you.
The power of social media in business cannot be underestimated. Social media is transforming the way businesses sell their products and services.
A recent study by the Internet Advertising Bureau revealed that nearly 80% of consumers would buy more often in the future because of a brand’s presence on social media.
Social media is a great channel to engage your customers and provides a free method for letting people know who you are and what you do.
Reviews from existing customers
Reviews from your existing customers are a great way to promote your franchise and let people know how good you are at what you do. People are more likely to trust reviews and personal recommendations from other people.
By asking your customers to leave a review either online or in written form so that you can use it on your marketing collateral, means that when people look you up to decide whether or not to use your product or service, you’ve got glowing reviews that will help them decide if it’s right for them.
Utilising PR for franchise growth
In this article, Rev PR looks at the importance of PR in franchising, tips for planning a campaign and seasonal PR opportunities to keep in mind.
When you get it right, Public Relations can make a huge impact in your business. Do you utilise it effectively or, like many business owners, are you unsure how to harness the power of PR?
Public relations does exactly what it says on the tin. It’s about communicating with your public audiences to help raise the profile of your business and increase consumer purchases or franchise sales – or both!
Create a captivating campaign
The best campaigns captivate your desired audience and cause a pre-planned reaction. Sounds simple right? But there are some golden rules to follow. It’s something that we specialise in at Rev PR so here are a few tips when planning your own PR power campaign:
1. Identify your target audience: Be specific here. It’s normal to have multiple PR campaigns running that are targeting different demographics
2. What message do you want to communicate? For example, are you looking to educate, inspire, raise a fear-factor or simply have a bit of fun to raise awareness with your audience?
3. How do you want your audience to react? Be very clear and keep it simple. Asking people to do more than one thing is tricky. Be sure your call to action fits in with your sales process or has a specifically planned outcome if it’s a one-off.
Once you’ve done that, you need to work out how you’re going to capture the attention and imagination of your audience. People’s attention spans aren’t what they used to be, our senses are constantly bombarded by TV, radio, print and social media so you need to get creative to stand out!
4. Brainstorm some fun ways to engage through suitable media platforms: They can be as whacky as you like because you can always make them practical later! Consider things like - competitions, sponsorship. celebrity endorsements, affiliations with charities and surveys and their results.
To complete your planning think about:
5. Who can you get involved to help spread the campaign far and wide?
6. What can you put in place to make your audience response measurable?
Following these steps will help you to create a dynamic and effective campaign that can be monitored as part of your overall marketing strategy.
Making the most of seasonal PR opportunities
One of the great ways to get PR published is by hooking on to something already being talked about in the media. So, does your business have anything to say as the year progresses through the seasons? Here are some things to think about as you plan your PR schedule each quarter:
- Do you have products or services that are more popular at certain times of the year?
- Are there hints and tips you can give for customers to prepare for certain weather conditions?
- Do you have such busy times of the year that customers need to pre-order items?
- The big holidays
- Can you feed into the hype surrounding Christmas, Valentine’s Day or Summer holidays? Don’t forget that customers prepare well in advance and this means that the media prepare even further in advance! You can normally find out their deadlines for holiday features from their editorial team – just give them a call!
At Rev PR we keep a calendar of special events and days so that, for example, if we have a client in the QSR sector and “Burger Day” is coming up then we’ll plan a story to pitch out to the media in plenty of time.
Now all you have to do is decide how you are going to pitch your article, news item or advice piece!
How to keep your staff motivated
It is said the success of a franchise is a result of having good franchisees. It can equally be said that a franchisee’s success can be attributed to their staff.
A franchisee needs to make their staff feel wanted and respected. If they feel like part of the family then they are more likely to work hard and stay with the business.
Why is motivation important?
A company that offers no incentives and has a lack of moral in the workplace can expect a high turnover of staff.
Finding the right staff is not the hardest part of a successful work place, retaining staff is. It can be difficult to hold on to good people if not treated right. You need to use incentives to keep them interested. Monetary incentives are useful in the short term, but it is instead incentives that make employees recognise that the company is investing in their future that works e.g. training them in new skills, sending them on management training programs etc.
The culture of the business can help to retain staff. If franchisees can build a culture that shows that they are hands-on in the business and that they care for and are willing to invest in the future of their employees and the business, then they are more likely to retain happy staff.
How can a good franchisor help?
Franchisees will work with their franchisor to make a plan for who they should be recruiting, what training to offer and how to motivate. They will put together a comprehensive training plan.
If the franchisor ensures that there is consistency throughout their network when it comes to recruiting and retaining staff, then they will become known as “a company to work for”. If they can get this status, then it will be a lot easier for them to hire the best people.
What should be considered when a franchisee is recruiting staff?
Franchisees need to make sure that the people they bring in to the franchise, fits in with the culture of the business. If someone doesn’t fit in then it can disrupt the workplace.
It is vital that the franchisee knows that they are looking for including the skills and personality sought after. A good interviewer will know how to abstract the information they need from the interviewees.
Find out more about the interviewee. What are they looking for from the job, what are their aims and objectives, where do they see themselves in 5 years time? Their goals and aspirations need to fit with what you are offering. Also ask behavioural questions to help determine what a person would do in certain situation
What can franchisees do to motivate their staff?
Franchisees sharing information such as weekly sales, new developments in the franchise network etc can help staff members feel like an integral part of the company.
Simple incentives like bonuses for meeting targets, employee of the month, team building events etc can make a difference to a company.