Investing in a franchise business is a risky move for some. Whereas for others, it’s a way to invest in a business with a proven track record of success. In fact, the failure rate of franchise businesses is lower than independent businesses. With careful consideration and lots of research, taking a leap into the world of franchising could be a good move for both franchisor and franchisee in 2022.
The most successful franchise businesses have a great concept – a service or product that is unique and in-demand. The franchisor/franchisee partnership must be a strong two-way relationship with great communications and a constant focus on the success of the franchise.
How to be a successful franchisee
Buying into a franchise does not mean that you can sit back and watch the money roll in, it takes lots of hard work and requires high levels of drive and determination to succeed. You also need:
- A solid business plan with clear goals and actions that you have discussed with your franchisor before you reach your agreement.
- Training and incentives will help a good franchisee to become great. This skill base and knowledge should also be passed on to your team.
- A positive working relationship between franchisor and franchisee will create a successful environment to empower your team.
- The size of a franchise territory will determine the scope of target customers. Understand your territory well and work with your franchisor to evaluate the potential.
- Sales and marketing are the vital aspects of setting up a new franchise. You can’t let up on increasing your visibility and creating leads for a moment.
How to be a successful franchisor
A good franchisor allows the franchisee to be in control of their own success by creating the framework within which the franchisee can fulfil their potential. The traits of a successful franchisor are:
- Success in their own business. The best franchisors have a proven track record in business. They have faced challenges and can mentor their franchisees through tricky times.
- Sector knowledge is a key success factor so that you can guide your franchisees and keep up with the latest trends in demand and technology.
- Brand passion and consistency builds a loyal customer base. A great franchisor balances a fierce protection of brand standards with offering flexibility to franchisees to build their business on their terms.
- Accessible support must be available to your franchisees. From induction training to location selection and staff recruitment, the support must be ongoing.
- Mutual respect in the franchise partnership will help to grow the business. The franchisee provides valuable feedback from customers to guide new product or service development. When there is open communication, the franchisee is more motivated to succeed.
Creating and maintaining an excellent relationship between franchisor and franchisee is the most important aspect of a successful franchise business. The franchise agreement must be mutually beneficial to both parties so that the franchisor can expand their business and the franchisee has the confidence to start their own business.
If you’re thinking of investing in a franchise or are interesting in a franchise model for your business, get in touch with the business experts at CRM on 01865 379272.