Proper business planning can lead to tremendous success while poor planning can prove it as a disaster
A ‘franchisor’ is a person who intends to franchise his business by selling out the franchises while the person who buys these franchises is known as the ‘franchisee’. So, that depicts that it gives rise to a very sophisticated buyer and seller relationship and that is why this process needs to be carefully looked upon. As clear from the above line that franchising business is not merely an ordinary buyer/seller transaction so one needs to be more careful about the decision of franchising business. It goes without saying that it could be very risky and could cause loss when the adequate and appropriate process is not followed in doing it. But this is not to say that many franchising businesses all over the world have proven to be great successes so what just one need is to follow the process in order to reach a decision.
Some Prerequisites for these Steps:
As already mentioned above, this is not the sole series of steps that one needs to be worried about in order to successfully franchise as there many prerequisites for that as well. In order to reach that franchising process so that the franchising business could be a success, one needs to look at various criteria which will help in assessing the probability of the success for franchising business. After making that assessment, a final decision has to be made about whether to go about it. Then comes the step of actually looking at the circumstances of the company or organization so that it could be known that whether it is franchisable or not. When this is done and all things are sorted out regarding that then finally the stage arrives of franchising the business and hence the question of how to franchise becomes inevitable. All this represents the necessary requirements which are very important in the franchising process and in addition to that, they also point out to the fact that to about these in an ascending order is also crucial to the success of franchising business.
Steps for successful franchising:
Franchising the business involves the following major steps: strategy for expansion, preparation and submission of legal documents, operations manual for the franchise and the relevant supporting material for marketing purposes.
Business Evaluation and having a unique concept:
The person who intends to do franchising business needs to carefully evaluate his business status and his individual standings to make it a success. These two key words are considered to be the basis to diving into the franchising business. One needs to make sure that all the factors are going well on both of these grounds before moving any further. Business evaluation is a very crucial step in this regard. The franchisor needs to carefully observe and evaluate his/her business standings in order to make a wise decision. As is evident from the previous line, this dictates totally a subjective analysis of one’s business so that he could be sure of the fact that his business is in the right position and situation to sell its franchises. This analysis could prove to be crucial in the franchising process. The step which lies next to business evaluation in franchising process is having a unique and good concept for the franchising business. It is highly likely that any franchising business with a weak and average concept would fail given the fact that the world had turned into a global village. So, in order for a franchising business to excel properly the concept has to be unique and practical enough in order to get handsome profits. Moreover, it should be of such a nature that the targeted franchisees like it so that more franchises could be sold out and more profits could be earned from that franchising process.
Financial Evaluation and proper market research:
It is needless to mention that one of the most important steps in franchising process involves the financial evaluation. The franchisor needs to make sure to carry out this evaluation because he does not want to be in loss because of missing on this part in the process of franchising. The study of the target market is also extremely crucial. The franchisor must make sure that there is enough target consumers for the products which his franchises will offer. Moreover, he also needs to make sure of the fact that there must not be any saturation of this kind of outlets which might significantly hamper the profit margins and hence might discourage the targeted franchisees. As it is quite clear that if there is already greater availability of the products for which the franchise is meant for then that means the whole process of franchising was nothing but a disaster. On the other hand, if there are very few consumers in the target market then it also depicts heavy losses and represents the franchising process as totally flawed. So, the franchisor needs to make sure to undergo these steps while starting his own franchising business otherwise there will be very less likelihood of his profits and success.
Devising an Operations manual for the franchises:
The making of operations manual of the franchise is a vital step for franchising. Operations manual is actually the tool which will serve the purpose of satisfying the target person that the organization is fully capable of efficiently dealing with the expansion through franchise. Moreover, it will also provide the details and strategies to serve these purposes. Hence in this manner the operations manual seems to be a decisive part in the success of franchising business. This step of developing a perfect operations manual is very important in order to ensure quality control and success of franchising business. Most importantly, this manual will serve as a legally binding quality control for all the franchises which will also help in the success of the entire chain of the franchise.
Arranging training programs for the franchisees employees:
Moreover, a franchisor should also devise different training programs to equip the franchisees and his/her employees with efficient skills to make this franchising business a complete success. Informational sessions and computer-based equipments have been proved to be very effective in order to serve the purpose of successful franchising. Moreover, training videos can also be used as effective tools for training purposes.
Strategy making and adequate planning for the franchising process:
Planning and devising is very crucial to any kind of business so is it to the franchising business. So, it counts as a very crucial step in the franchising process to devise the strategies and have them planned wisely and professionally in order for the franchising business to succeed. There must be a proper plan that how to carry out the franchising business. The franchisor needs to be clear of the fact that what does he actually intend from that process. He needs to be sure of the goals that are attached with this business. It means that to what extent the franchising business should expand and in what capacity. All of these issues are crucial and vital in the franchising process. This is important to mention here that a proper business planning can lead to tremendous success of this franchising business while a poor planning can prove it as a disaster. So, the franchisor must assess the capabilities of his company before devising any future plans for the franchising business. He needs to be sure of the fact that the franchising business requires clear strategy and goal in order to prove it to be a success. This marks a crucial step in the franchising process.
Legal Requirements for Franchising:
One thing needs to be kept in mind that franchising is after all a kind of business and to do any sort of business anywhere the businessman has to be entitled to do so. This brings in the issue of legal documents. At this point the status of the franchising business is crystal clear; one can only run the franchising business when he is legally entitled to do so. In case he is not then no matter how much effort has been put in by the franchisor to devise strategies and other plans to make it success, it is all in vain. In order to be legally entitled to sell franchises and run a franchising business, one needs to submit certain legal documents to the appropriate state authorities. In order to sell the franchises, a franchisor need to develop these two documents namely, franchise agreement document and Franchise disclosure document. After this step, these documents should be filed with the appropriate state official authorities. In addition to that, maintenance of this compliance is also necessary which can be achieved by regularly documenting the compliance with state and federal authorities on regular basis. Another important thing to keep in mind regarding this procedure is that the procedure for the requirement of legal documents might vary from state to state and from country to country. So, before preparing the legal documents the franchisor had to make sure that which procedure is actually applicable in the particular area where he intends to do his franchising business. It marks a crucial step in the franchising process without which the franchising business cannot even start and the franchisor is barred from selling even a single franchise.
State of the Art marketing plans:
The franchising company must have proper and state of the art marketing plans in order to make this franchising business a complete success which makes it an important part of the procedure. It dictates that the main requirement of this business is the selling of franchises which cannot be done unless the company has a specific and efficient marketing plan. It seems to be the ultimate aim of the franchisor to attract more and more franchisees who are willing to but his franchises. But this that seems quite impossible unless they are provided proper marketing plans to assure them that their money is not going to be wasted in any manner. It is needless to mention here that the marketing tools will aid in the sale of franchises. Many techniques can be adopted in order to serve that purpose. The franchising process involves these techniques at its heart in order to make the franchising business a complete and total success. These techniques involve mailing the targeted franchisees. Another very effective technique in this regard is having the brochures distributed at many different events so that the targeted franchisees could be made attracted towards buying the franchise.
All the above-mentioned discussion highlighted upon the different aspects of the franchising process. These processes are deemed to be crucial and necessary for establishing the franchising business. Moreover, some of the steps mentioned above also guarantees the success of the franchising business. The franchising process involves several steps which were expounded upon above. Another important factor to keep in mind is that these processes need to be carried out in a certain specific order so that the success of the franchising business could be ensured and the whole franchising process could be made worthwhile.