Unlocking the Potential of Business
Franchising in Australia has never been more vibrant and contributes $130 Billion to the economy, representing 14% of GDP. There are currently over 1000 franchise systems in operation in an industry that employs over 600,000 Australians.
Everyday and in many different ways, we conduct business with a local franchise. On the way to work we buy our petrol at a local Fuel franchise, we pick up our morning “java” at a Drive-In Coffee franchise, At lunch time we visit the local Chicken franchise and say hello to “the Colonel”. The lady of the house will get her hair styled at the local Hair & Beauty franchise and on the way home order a birthday cake for Josh at the local Cake Shop franchise. You will need to visit the local Car Wash franchise to keep the dream machine looking good and stop off at the local Dry Cleaning franchise to collect your Sunday best! When you arrive home Sandy from the local Dog Wash franchise is there to wash Max and Tom the plumber has arrived from the local Hot Water franchise to fix that leaking pipe…
Every day in so many ways Franchising shapes our life. All this activity and the extent of franchising in almost every industry opens up opportunities for many, many people. So maybe you think you have a business you could franchise, your passion… that dream you want to bring to life…. or perhaps you’re considering purchasing a franchise outlet to stop working “for the man” and start working for yourself, or actually maybe you’re already in franchising but really need some expect advise on how to make your business more successful?
Then you have come to the right place.
The Franchise Whisperer has all the answers. Let’s begin.
Motivation
Franchising is a wonderful way to become involved in any business enterprise and it can also be the key that unlocks the door into the place where dreams are stored!
Fundamental to franchising excellence is the “transparency” of the whole opportunity. Franchising should in fact be like a “Glass off Water”
The Glass should be clean and unblemished to start with – so should a franchise . The Water should be clear and uncontaminated– so should a franchise On the one hand so strikingly simple– so should a franchise. Yet on the other so uniquely complex– so should a franchise . Transparent and easy to see it is pure– so should a franchise It should be fresh– so should a franchise. It should taste good– so should a franchise. It should be refreshing– so should a franchise . It should sustain you– so should a franchise It should “smell” right– so should a franchise It’s the same quality everyday– so should a franchise It’s easy to be able to replicate it again and again– so should a franchise . Finally it should be able to “support life” SO SHOULD A FRANCHISE.
“We make a living by what we get but make a life by what we give”
WINSTON CHURCHILL
For Franchisor
So you want to develop your current business into a franchise but don’t know where to start?
Franchising is a fantastic way to grow and develop your own business and most importantly it is the proven format most likely for a successful outcome. Establishing and operating any small business can be risky, but with franchising many of these risks are significantly reduced as your franchisees follow the guidelines of your already proven business model.
A franchisor can expand the business quicker and more effectively and over time can generate substantial financial rewards. However franchising is not for the faint hearted and requires a long term commitment and usually significant initial capital. The Franchise Whisperer provides all the answers you need to know to determine if you are suited to franchising and if your business model can actually be franchised. We can provide advice covering all aspects of establishing a franchise system and what you need to know and may need to do before, during and after you have your business franchised.
For Franchisor: Establishing a franchise system before you start (a) Franchise feasibility assessment (b) Business plan (c) Funding Growing and developing a network Site selection Effective field management Franchise recruitment Franchise relationship management Getting the most out of your Franchise Advisory Council Understanding the franchise documents and the code First Class franchise ethics and Franchise compliance Auditing and Benchmarking.
There are 3 key components of establishing a franchise and the things you may need to do before you start. The franchise feasibility assessment looks specifically at the key drivers that will determine if starting up a franchise is viable and sustainable long term. An evaluation of the current operation has to be undertaken to see how easy it is to replicate the business model and also to assess the financials. A franchise system has to deliver adequate returns to the owner as well as being profitable for the franchisee. Working out exactly what the fees should be and how the system will sustain itself over the establishment years is critical. Next would be the development of the Business Plan or the “roadmap” if you like, for the franchise, including the correct company structure and asset protection strategy. The Intellectual property of any business is one of the most important assets and needs to be adequately protected. The business plan must detail all of the aspects of establishing and operating the business model and may need to be amended during the process. Funding for any project is another important issue and needs to be looked at closely. Consultation with a financial advisor and or accountant is absolutely necessary and this advice needs to consider all of the aspects of both the feasibility and business plan.
There are many ways a network can and should grow. Assessing exactly which method is right for you needs to be carefully considered. We look at what mix of company owned v franchisee is right for your business and where should your network expand first. How should your interstate roll out happen? Do you establish in one state first and then move to other areas or do you establish some business in each area early? We can help you determine what level of field support you need and how should the set up of each site be managed. Mapping and demographic research would usually be a part of any network development plan.
Determining how many field staff you need to support your network is a key component in franchising success. Not enough field staff can mean underserviced franchisee and can translate into franchise dissatisfaction as well us under performance. Having the right ration of site v field support officer will make all the difference to the overall business performance long term. To what extent benchmarking and auditing are used will vary from system to system but both are valuable tools in field management. We can help you make sure you have this bit right.
Wether you manage the recruitment process in house or you contract experts from outside to help you, it’s important to have a good well structured process for gaining new franchisees. A recent study into the causes of potential franchisee failure identified that poor recruitment process were a major factor in failures studied. Poor recruitment process allows under financed, under qualified and often those with the wrong attitude to franchising, joining the group. This spells disaster for all involved including other franchisees. We can help you explore the best practices in recruitment and hopefully help you determine what path you should be taking.
The franchise relationship has often been compared to a “marriage” and so understanding what makes for good relationships is essential. As in any marriage, both partners need to do there bit to keep things on track, but as a franchisor, you are more responsible than the franchisee is for this process and to have a system in place that facilitates clear, honest and open communication at all times. We can bring clarity to this area of franchising often neglected but the area where most value can be found.
Whilst not compulsorily, most franchise systems soon set up a “Franchise Advisory Council” to help and assist effective communications between franchisee and franchisor. A FAC is a representative body set up within the franchisee network and having members of the committee being current serving franchisees. It is driven by the franchisees themselves and is usually seen by the franchisor as an effective forum to obtain franchisee feedback and make improvements to the system. We can help identify key areas that a good FAC should address and how best to manage the franchise network more effectively and completely via the council members participation and influence.
This is the boring but necessary part of franchising and one the franchisor needs to know very well, Even though it is the lawyers who administer this part of the process, it is the part where most franchisors run into trouble by not understanding their obligations correctly. We can speak in easy to understand lingo about how a franchisor can best use the code as a tool for greater understanding and what pitfalls to avoid in the documentation process.
Business ethics can often be the difference between success and failure long term and we can give you a First Class look at this fundamental of good franchising. Those who get this bit right will achieve a far greater understanding of what successful franchising is really all about. How you make decisions as a franchisor and the motivation for almost every action will be governed to some degree by your business ethics. We can outline some of the good ones a franchisor should embrace. Also the actual “compliance” of both the franchisor and his or her staff in managing and facilitating the franchising system is one of the most important issues for any franchisor. Understanding what you can say and cant say and how you should treat your franchisees in all facets of the business relationship is vital for success.
There is an old saying that says “measure twice, cut once” and this is really a key component of successful franchising. We can affect the performance of what we measure and so if we are not “measuring” the important key results areas in the business and not checking that the franchisee is doing things in the correct way, we can’t be certain of how we are going. For this reason auditing clearly should be a standard policy in every franchise. We can show the type of things that need to be audited and what are the best ways to do this. In addition to auditing there is the process of “benchmarking” within your system. Benchmarking is such a great tool in many areas of the business and can add value to both the franchisor and the franchisee in various ways. Benchmarking allows a franchisor to measure how one franchisee is going against the “average” or the benchmark. Benchmarking allows the franchisee to provide any prospective buyer of their individual franchise a far more informative picture of how there business is tracking against the group and can often make a sale that much easier. Whatever the reason benchmarking is becoming the “benchmark” in franchising today. We can show you the many ways this can be achieved.
For Franchisee
So you want to buy a franchise but don’t know where to start?
Franchising is a fantastic way to own your own business and most importantly it is the proven format most likely for a successful outcome. Establishing and operating any small business can be risky, but with franchising many of these risks are significantly reduced as you follow the guidelines of an already proven business model.
The Franchise Whisperer provides all the answers you need to know to determine if you are suited to franchising and what franchise is right for you.
We cover all aspects of buying franchise and what you need to know and may need to do before, during and after you join a franchise system.
Individuals who wish to buy a going concern franchise from a current operator Mum and Dad’s looking to secure their future for their family through franchising Business owners that would like to convert their family business and join a franchise group in the same industry Anyone who wants to become a franchisee All those who are currently undertaking evaluation of any franchise system Those about to sign documents for a franchise Anyone considering establishing a franchise system of their own
For Franchisee: Are you ready to buy a franchise?
Prior preparation- Be Prepared – Personal evaluation, Capability, Correct Structure, Legal, Accounting, Finance, Commencement, Support, Personal Finances, Obtaining advice, what questions should you be asking.
(a) Disclosure Document (b) Franchise Agreement (c) Franchise Code of Conduct (d) Contract of Sale (e) Other Documents
(a) Franchise business (b) Franchisor (c) Business Industry
There are important and sometimes hard questions that you need to know the answers to before you progress down the franchising path. We will help you access if you are in fact suited to franchising in the first place and what particular franchises are the best match for you as an individual. We cover all aspects of the preparation needed in finding, evaluating and testing wether a franchise is right for you. We cover off on many of the questions you should be asking both yourself and the franchisor
There is a raft of information and paperwork and documents that need to be assessed during any franchise purchase. We will guide you through the many facets of discovering how best to manage this paperwork trail. Of all areas of franchising this is the bit that most people find hard to comprehend and often, dealing with lawyers and accountants in their “lingo” is the hardest part of all. Here we simplify the process and allow you to get a firm grasp on why all this paperwork is necessary and how to make sure it works for you
After your initial investigations and once you have decided upon a franchise that you think is a good match, you will need to conduct further evaluations of all aspects of the business. Firstly the franchise business models itself, how it works and what return can you expect it to deliver. Next the Franchisor, who are they, what are they like and how do they interact with the current franchise network. How financially stable is the franchisor and what is their track record to date. Becoming a franchisee is very much like a marriage and you need to know who your “partner” really is and that your happy to “get hitched” Finally the industry your franchise is in, how robust is it, what are the challenges the business might face and how and where does your franchise fit into the industry landscape.
Whilst franchising can be life changing for many, it is not without its risks. Knowing how you can protect yourself and what to be aware of during the investigation of any franchise is essential. We will detail a lot of Do’s and Don’ts and will highlight some key areas of focus when evaluating the opportunity
We cover all the things a new franchisee can do to embrace the system and get the best out of their investment in a franchise. Doing what successful franchisee do and making everyday a day of investment in your business