NFA Franchise Consultants
1Dec/17Off

Effective Franchise Sales Continued

Effective Franchise Sales Continued: Success In Franchising

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Specialists in Franchise Consulting & Franchise Sales Strategy

Effective Franchise Sales

Effective Franchise Sales

In my over three decades of experience as a franchise consultant, working in franchise development and franchise sales, I am often asked, “What makes one company succeed in franchise sales while another doesn’t?”

Rarely is there a single reason for success in franchise sales. Here, I will examine one of the many factors that can help Franchisors create a winning franchise sales strategy.

If you looked at my October post, you know that typically, there are three options for who is going to spearhead your franchise sales efforts, including:

  • Using the franchise management team (usually the owners of the franchisor company) as the franchise sales force
  • Retaining an outside franchise sales representative, such as a franchise broker
  • Hiring an in-house franchise sales person

Let’s assume that the owners/managers of the franchise company decide they do not want to handle franchise sales. The next decision is whether you wish to retain an outside franchise sales representative, such as a franchise broker. Here are the pros and cons of this option.

Here are the reasons to consider retaining a broker to generate franchise sales for your new franchise company:

  1. The broker has knowledge of franchising, including what is involved in franchise sales.
  2. Most franchise brokers work on a commission basis. In other words, their services do not cost the franchisor any money until franchise sales occur.
  3. Most franchise brokers represent several franchisors at the same time, so they may have a number of “qualified” prospects in the franchise sales pipeline.

There are also several negatives to using franchise brokers:

  1. The commission a franchise broker charges typically ranges from 33% to 50% of the Initial Franchise Fee. This percentage can amount to $10,000 to $20,000 or more. Some brokers even demand a portion of the royalties franchisees pay the franchisor.
  2. Legally, brokers are the franchisor’s agents. The franchisor is responsible for any misrepresentations made by the broker, even if the franchisor didn’t know about such statements or specifically prohibited the broker from making the claims.
  3. Franchisors, especially new franchisors, should carefully study all aspects of their franchise sales program. Handing off the sales responsibilities to a broker removes the franchisor from knowing everything about their franchise sales program---what works and what doesn’t work. It is essential that all franchisors stay involved in the franchise sales program---especially during the critical first few years of operations.

More on franchise sales strategy next time…

1Nov/17Off

Franchise Sales Strategy

Franchise Sales Strategy: Success In Franchising

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Specialists in Franchise Consulting & Franchise Sales Strategy

Franchise Sales Strategy

Franchise Sales Strategy

In my over three decades of experience as a franchise consultant, working in franchise development and franchise sales, I am often asked, “What makes one company succeed in franchise sales while another doesn’t?”  Rarely is there a single reason for success in franchise sales.

Here, I will examine one of the many factors that can help Franchisors create a winning franchise sales strategy.

If you looked at my September post, you will realize the importance we at NFA place on planning your franchise sales strategy.  It is critical to set your franchise sales goals and then create a plan for reaching those goals.

Along the way, you must be able to measure the effectiveness of your franchise sales efforts.  You must also be able to identify any problem areas in your franchise sales program so that these areas can be improved.

So, you have created your franchise sales plan, set your goals and decided how to reach your goals.  The next area you must address is who is going to spearhead your franchise sales efforts.  Typically, there are three options:

  • Using the franchise management team (usually the owners of the franchisor company) as the franchise sales force
  • Retaining an outside franchise sales representative, such as a franchise broker
  • Hiring an in-house franchise sales person

Examine the pros and cons of each option.  First, determine if the franchisor company is owned by people with sales ability.  The owners must also feel comfortable with and be available to implement the franchise sales program.  If they meet these three criteria, it can be advisable to utilize them, especially at the outset, because:

  • Often with a new franchisor, the owners are selling prospective franchisees on themselves since the new company does not have an operating history.
  • The more time spent with a prospect during the franchise sales process, the better the owners can judge if this is the person they want as the first franchisee.
  • The new company can keep the bulk of the initial franchise fee at a time when it is cash poor.

However, if the owners of the new franchise company are not available, able or willing to fill the franchise sales role, it may be best to either work with a reputable franchise broker or to hire a franchise sales person.

More on franchise sales strategy next time…


5Oct/17Off

Franchise Sales Effectiveness

Franchise Sales Effectiveness: Success In Franchising

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Specialists in Franchise Consulting & Franchise Sales

Franchise Sales

Franchise Sales

In my over three decades of experience as a franchise consultant, working in franchise development and franchise sales, I am often asked, “What makes one company succeed in franchise sales while another doesn’t?”

Rarely is there a single reason for success in franchise sales. 

Here, I will examine one of the many factors that can help Franchisors create a winning franchise sales strategy.

There is an old saying in business, “Fail to plan, plan to fail”. Nowhere is this adage truer than in franchise sales.

If you do not structure your franchise sales efforts, you will quickly lose control.

Remember, if your first few franchisees fail or are unhappy, it will be virtually impossible to sell more franchises.

We cannot stress strongly enough the importance of focusing on the success of your initial franchisees.  Part of this success is selling to the right people.

When planning your franchise sales strategy, ask yourself the following questions:

  • In what geographic area do I want to sell my first few franchises?
  • How many sales do I want to close my first year?  My second year?  My fifth year?
  • What qualities and skills will my franchisees need to succeed?
  • Will my target prospects change over time and, if so, how?
  • How can I market most effectively for franchisees?
  • What are the steps in the franchise sales process?
  • Who is responsible for each step?
  • How will we conduct each step in the franchise sales process?
  • How will we get from one step to the next in the franchise sales process?
  • If a desired prospect loses interest, how can I jump start the process?
  • How will I qualify a prospect before closing?
  • Under what circumstances should I say no to a prospect?
  • What is the most effective way to present my company’s story and benefits?
  • In the franchise sales process, how do we position the company against any competitors?
  • How can I judge the effectiveness of my franchise sales and marketing programs?
  • How can we track the sale from first point of contract to closing?
  • Once we close a sale, what steps should occur next and in what order?
  • How much time will we need to devote to getting a new franchise open?
  • After it opens, how much time should we allocate to assisting the franchisee?

As you can see, a casual approach to franchise sales is likely to fail.  The more carefully you plan out the franchise sales process, the more effective you will be both in franchise sales and the overall success of your franchisees.

More on franchise sales next time…

 

20Sep/17Off

Franchise Support Programs

Success In Franchising: Franchise Support Programs

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Specialists In Franchise Consulting

Franchise Support Programs

Franchise Support Programs

In my over three decades of experience in franchise consulting, I am often asked “What makes one company succeed in franchising while another doesn’t?”

Rarely is there a single reason for success or failure in franchising. Here, I will use my experience in franchise consulting to address some of the factors that determine success.

From my perspective as a professional in franchise consulting, franchising your business is not particularly difficult. Literally thousands of companies have successfully franchised; and many have brought in specialists in franchise consulting to help.

It is important to properly structure the franchise program to reflect the specific business you are franchising.

Often, a person experienced in franchise consulting can save you time and costly mistakes by helping you make the right choices.

At NFA, one of the areas we take most seriously in franchise consulting is properly structuring the support programs the franchisor provides the franchisees.

As part of our franchise consulting services, we help the franchisor carefully plan the ways it will help its franchisee succeed.

In this planning stage, a professional in franchise consulting can be particularly beneficial. The questions the franchise consulting team can help you answer include:

  • What guidance are your providing in site selection and lease negotiation?
  • Will you supply sample floor plans or architectural plans?
  • What pre-opening training programs are you offering?
  • Will you supply any equipment, inventory or furniture to the franchisee before opening?
  • Will any franchisor personnel be on site to help open the business?

Your franchise consulting professional can also help you structure your on-going support programs for your franchisees, by addressing the following issues:

  • What sort of post-opening training will you make available?
  • Will you maintain field support staff? On what basis? What is their role?
  • What quality control programs are needed?
  • What information are franchisees required to submit to your office?
  • Is a technical support hotline for franchisees advisable?
  • Does the franchisee have to purchase any items from the franchisor on an on-going basis?
  • If a problem occurs, how can it best be resolved?
  • How can you provide these services cost effectively?

As you can see, a person knowledgeable about franchise consulting will be tremendously valuable. Your franchise consulting advisor can help you design workable programs that allow you to provide the assistance your franchisees will need to achieve initial and on-going success.

16Aug/17Off

Quality Control In Franchising

Franchise Quality Control: Success In Franchising

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Marketing Specialists

Quality ControlIn my over three decades of experience as a franchise consultant, working in franchise development and franchise management, I am often asked, “What makes one company succeed in franchise management while another doesn’t?”

Rarely is there a single reason for success in franchise management.  Here, I will examine one of the many factors that can help Franchisors create a win-win situation for their franchise management systems.

Carefully consider your on-going franchise management programs.  One key to on-going franchise management success is maintaining a focus on quality control.  Quality control leads to more successful individual locations as well as a stronger company overall.

Franchising is successful in large part because the franchisor provides a product/service and a system that can be replicated from franchise to franchise.  Customers feel comfortable patronizing different franchise locations because they believe that each location will meet their expectations for quality.

Your franchise management program will succeed only if you build in systems to make sure the customer’s experience will be duplicated at different locations.

The franchisors most successful in their franchise management efforts build quality control safeguards into their daily operating procedures.  You must carefully develop measurable standards and communicate those standards clearly to each franchisee.  In addition, you must study and refine your operating systems to ensure your franchisees provide consistent quality at every customer interaction.

In this aspect of franchise management, thorough training is vital.  Each franchisee must be properly trained.  Each franchisee, in turn, must ensure that all employees of the franchise location fully understand and perform their responsibilities.  Every representative of the entire franchise organization must strive to meet the franchisor’s standards.  Only then can your franchise management system reach its true potential.

14Jul/17Off

Franchise Marketing

Success In Franchising: Franchise Marketing

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Marketing Specialists

Franchise Marketing

Franchise Marketing

In my over three decades of experience as a franchise consultant, focusing on franchise marketing, I am often asked, “What makes one company succeed in franchise marketing while another doesn’t?”  Rarely is there a single reason for success in franchise marketing.  Here, I will examine one of the many factors that can help Franchisors succeed in their franchise marketing.

Franchise marketing can be a relatively simple proposition.  A number of NFA’s clients decided to franchise their businesses because prospective Franchisees came to them, asking to purchase a location.  If you have received similar inquiries, keep a list of names and contact information.  This list of prospects is a good place to start your franchise marketing.

When building your franchise program, it is important for you to develop your franchise marketing strategy.  Where do you want to begin selling franchises?  In your hometown?  In other nearby markets?  Should your franchise marketing target a particular size market?  Does your franchise require a particular customer base that may be geographically concentrated? Are you focusing your franchise marketing efforts in a particular area or nationwide?  Is there an ideal time of year to launch a business of this nature?

When putting together your franchise marketing strategy, it is also important for you to create your target Franchisee profile. What type of person are you seeking?  What kind of experience, knowledge, skills and/or licenses will your Franchisee need?  What financial assets?  Character? Personality?  Business ethics?

Now that you know where to market and the prospects you want to reach with your franchise marketing, you can begin deciding how to best connect with those prospects.  Should you advertise nationally, regionally or locally?  Is there a particular medium that narrows the focus on your best prospects?  Set your budget, and then decide how to best allocate your franchise marketing dollars.

Another source to consider when putting together your franchise marketing strategy is your existing customers.  Depending upon the nature of your franchise and how specialized the knowledge required to operate it, you may find that some of your best prospects for your franchise marketing may come from your existing customer base.  After all, these people are familiar with your business and presumably fans.

15Jun/17Off

The Franchise Training Program

Franchise Development: The Franchise Training Program

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Consultants

Franchise Training Program

Franchise Training Program

In my over three decades of experience as a franchise consultant, working in franchise development, I am often asked, “What makes one company succeed in franchise development while another doesn’t?”

Rarely is there a single reason for success in franchise development.  Here, I will examine one of the many factors that can help Franchisors create a win-win situation in the franchise development process.

As you perform your franchise development, carefully consider your franchise training program.  There is no one-size-fits-all franchise training program.  It is critical to the ultimate success of your franchise development to determine the proper franchise training program for your particular company.

When developing your franchise training program, realize that a number of factors will determine the optimum content, length and participants.

  • When creating your franchise training program, ask yourself “What will I have to teach my new Franchisee (and possibly his/her staff) for the new franchise to operate properly?”  If you have trained managers for your company-owned location, any such education can be incorporated into your franchise training program.  Also, your franchise consultant should be able to provide you a template for a franchise training program.  Any existing Manuals you may have will help you structure the content.
  • In developing your franchise training program, next determine who should be trained.  Certainly train the Franchisee if he/she will be owner/operator or the Franchisee’s General Manager if the Franchisee is not responsible for daily operations.  Your franchise training program may include other managers or key personnel, for example, Kitchen Manager, Technical Manager, Customer Service Manager or Lead Technician.
  • You must then establish the length of time needed to impart the necessary knowledge and skills to each person in the franchise training program.
  • Decide the training format for each topic in your franchise training program.  The majority of training will be hands-on, particularly for operations.  However, some areas, such as marketing or human resources, will need a classroom setting.
  • Select your trainer(s) for your franchise training program.  Initially, most or all of the training will be conducted by members of the Franchisor management team.  However, some of your key employees may be instructors as well.
  • Determine where to conduct the training.  Typically, most of the franchise training program happens at one or more company-owned units.  The franchise training program may also occur at a franchise location.
  • Another issue when creating your franchise training program is the training materials needed.  Most of NFA’s clients use their Operations Manuals.
  • Choose when to conduct the training.  When should the Franchisee be back on site to concentrate on the opening?  Should all Franchisee personnel train at the same time, or should you stagger the training schedules?
  • How much time should the Franchisor spend at the Franchisee’s location performing additional training?  What topics should be covered? When is the best time to conduct this segment of the franchise training program?

Of course, your franchise training program will evolve over time.  It is important during your franchise development process to do your best to create an organized, methodical franchise training program.

15May/17Off

Franchise Development

Franchise Development: Making Sure the Franchisee Can Make Enough Money

Reflections of a Franchise Consultant

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Consultants

Franchise DevelopmentIn my over three decades of experience as a franchise consultant and working in franchise development, I am often asked “What makes one company succeed in franchise development while another doesn’t?”

Rarely is there a single reason for success or failure in franchise development.  Here, I will examine one of the many factors that can help Franchisors create a win-win situation in the franchise development process.

Many business owners considering taking the franchise development route to grow their businesses have asked me, “How much money does the Franchisee need to make?”  The simple truth is there is no one right answer to this question.  However, it is critical in your franchise development to determine the answer from your prospective Franchisees’ viewpoint.

When working on franchise development, recognize there are a broad variety of opportunities available.  Franchises come in a vast range of industries, can require very different skill sets, serve diverse customer bases, involve varying time commitments, entail different levels of initial and on-going investments, create different levels of income and afford their owners unique emotional rewards.

Each of these factors must be examined when you are in the franchise development stage.  With one franchise, the average Franchisee may make $10,000 per year and another, the average Franchisee may make $500,000 per year, and both sets of Franchisees are happy.  No one size fits all when it comes to the franchise development process.

When working on franchise development, you must determine whether the likely income the Franchisee will earn will make it an attractive offering.  During the franchise development process, consider:

  • The initial investment;
  • The on-going investment;
  • The gross revenues likely to be generated;
  • The anticipated profits;
  • The industry in which the franchise is a part;
  • The skills and experience that the Franchisee will be required to possess;
  • The average income a person possessing the required skills and experience is accustomed to earning;
  • Whether you are targeting a person seeking supplemental income rather than the main household income;
  • The uniqueness of the business;
  • The typical income of the Franchisees of any directly competing Franchisors;
  • The time commitment required of the Franchisee;
  • Whether you plan to allow Franchisees to own multiple locations; and
  • Other benefits of owning your franchise.

This last point cannot be overlooked in the franchise development process.  There are businesses such as travel agencies or pet services that do not produce a high level of income, but give the owner a tremendous amount of emotional satisfaction, such as free or discount travel or the opportunity to spend their time in a field they love.  When you are planning your franchise development, be aware of the emotional benefits of your franchise.

12Apr/17Off

The Right Fundamentals when Franchising a Business

There is a common thread with companies who have succeeded in franchising a business: a Franchisor with a proven concept, operating model that can be duplicated and the right motivation.

There are very few cases in which franchising a business should be undertaken without a proven business model.

Regardless of how inspired an idea it is or how persuasive an argument can be made to franchise a hypothetical company that has not yet been tried, there is little chance of success in franchising a concept that does not have a proven operating system.

Why would someone invest his/her hard earned money in an untried franchise idea? At National Franchise Associates, it must be an extremely compelling situation before we will recommend to business people to launch franchise operations directly from an untested concept.

Instead, the entrepreneur who wishes to succeed in franchising a business must first create a workable prototype with demonstrated demand and effective systems and procedures. Remember, a key to successfully franchising a business is others must be able to duplicate the operations.

Never forget that franchising a business is not a quick and easy solution to a corporate cash flow crunch. Rather, it is a long-term business growth strategy.

Next, when franchising a business, determine if the franchise operations will generate enough revenues to fund the Franchisor’s growth and maintain your Franchisee support programs. In addition, you must ascertain that your Franchisees can make sufficient money to survive. Another important aspect to success when franchising a business it to be careful to grant franchises to the right Franchisees – people who share your vision for the company, have the proper skill set to operate the business and possess the requisite resources.

When franchising a business, you must understand that you are serving two sets of customers: (1) your Franchisees and (2) the end-line customers who purchase the Franchisees’ products or services. When franchising a business, you must structure your franchise operations to enable you to meet the needs of both customer groups. We have found that success in franchising a business comes to those companies which keep an unwavering focus on meeting the needs of both their Franchisees and their end-line customers.

20Mar/17Off

Well Written Operations Manuals

Keys to Successful Franchising:
The Importance of Well-Written Operations Manuals

Reflections of a Franchise Consultant : Franchise Operations Manuals

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Consultants

In my over three decades of experience as a franchise consultant, I am often asked “What makes one company a successful franchising entity while another fails?

Rarely is there a single reason for successful franchising versus franchising failure. Here, I will examine some of the significant factors that can help a Franchisor put together a successful franchising program.

There are many benefits to having a comprehensive, well written set of Operations Manuals for your franchise program.

These benefits include:

  • Operations Manuals are invaluable and effective training tools, promoting consistency and quality throughout the franchise network
  • Operations Manuals can help your Franchisees open their businesses more efficiently
  • When properly drafted, these Operations Manuals can serve as one of the strongest selling tools for the franchise program
  • Operations Manuals help your Franchisees run their businesses more successfully
  • Operations Manuals contain the details of the proper procedures, saving both the Franchisor and Franchisee valuable time and money by reducing the amount of time needed to assist new Franchisees
  • When all the standards of your operations are detailed in a clear manner in the Operations Manuals, these standards and procedures become part of your Franchise Agreement
  • The act of creating Operations Manuals can enhance your company's systems by forcing you to examine and improve the way you currently operate your business
  • As you react to new market trends, technologies and competitive forces, Operations Manuals can be updated to reflect new products, services, policies and procedures
  • Operations Manuals strengthen the operations at company-owned locations

A proven and documented system of operation can be the single most valuable asset a Franchisor provides a Franchisee. Operations Manuals can be a strong selling point for your franchise program. These Operations Manuals serve as an invaluable aid to both franchised and company-owned locations.

National Franchise Associates offers the following types of Operations Manuals:

  • Pre-Opening Procedures Manuals
  • Daily Systems & Procedures Manuals
  • Operating Manuals
  • Sales & Marketing Manuals
  • Personnel Manuals
  • Accounting & Bookkeeping Manuals
  • Revising and Updating Existing Operations Manuals
  • Training Manuals