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Posted by Sarah Brown on 02 Dec '21

Why you might consider franchising and some words of caution

Franchising can be a potent operating model to grow businesses, social enterprises or charities.

Done well, it provides the support of a proven operating model with the passion you get when someone feels in control of their destiny. It gives people who may not have the confidence or an idea to go it alone a structure. It allows an organisation to grow more quickly and involve passionate people with unique local knowledge.

Poorly done franchising can lead to frustration, distrust, and even theft. Either or both sides can get frustrated, feel taken advantage of, and seek ways to get what they think they deserve.

For someone considering buying a franchise, don't be seduced by low ongoing franchise fees. How much will the franchisor care if they have little to lose financially, and how can they afford to give you adequate support.

Suppose you are thinking of franchising your organisation. In that case, you need to think through the revenue models and what characteristics you are looking for in franchisees to make them successful.

It is best to plan a franchise from the start. You can then track what you are doing at every stage to create your manual of running the business. If you don't do it as you go along, you will forget critical things that people need to do or be aware of.

You need to work out your financial model to ensure you make money as a franchisor and can afford to support your franchisees. How will you prevent fraud and protect your brand? A good franchise makes everyone rich/successful (this might be in how you change the world). You harness the passion that people get from running their own business but with support, but a bad franchise leaves everyone feeling sour. In my experience working in and with franchises including business, social enterprise and charity, franchisees start grateful and keen. As they get more expert, they feel that the franchisor is taking money for nothing. They are doing all the work - the skill is to ensure the franchisees continue to get value for money.

If you are thinking about franchising do give me a ring for a free chat.

Franchising is just one part of strategy, here are some other blogs to read if strategy interests you:

It's the time to think seriously about Collaboration. Here are three reasons why

Strategic thinking for charities and social enterprises in the Pandemic

The six steps to successful growth

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Tags: strategy Franchising