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Franchise Planning Keys

Keys to Successful Franchise Planning: Choosing the Right Franchise Owners

Reflections of a Franchise Consultant : Franchise Planning

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

In my over three decades of experience as a franchise consultant and specialist in franchise planning, I am often asked “What makes one company succeed in franchise planning while another doesn’t?”  When it comes to franchise planning, rarely is there a single reason for success or failure.  Here, I will examine one of the important factors in franchise planning.

Choosing the right people as your Franchisees, particularly at the outset of your franchising efforts, is a key element in successful franchise planning.  Your first few Franchisees will, in large part, determine the success of your entire franchise program.  If they are unhappy or do not prosper, it will be virtually impossible to sell additional franchises.  You must put a great deal of thought into this aspect of franchise planning.

Remember, the Franchise Disclosure Document must contain a list of all current Franchisees as well as a list of any Franchisees who left the system in the previous twelve months.

As a franchise consultant and franchise planning specialist, I believe this requirement is one of the most meaningful in the franchise disclosure laws.  It gives your subsequent prospects the opportunity to talk to your Franchisees before investing.  When performing your franchise planning, always remember that you can ill afford a failure among your first few Franchisees.  One failure out of two or three is far more devastating to your long-term growth than one failure out of 25 or 50 franchises.

When performing franchise planning, a wise Franchisor carefully considers the attributes his/her Franchisees must possess.  These factors include financial resources, work experience, skills, personality and character.

When franchise planning, there is a very important question to ask about any Franchisee under serious consideration, “Is this person a team player who will support my company culture, goals,  growth and franchise planning?”  Spend time with your prospective Franchisees so that you can learn more about the real person, not just the façade the prospect may be showing.  Successful franchise planning means you must remember that a franchise is a long-term relationship; the initial term for franchises is usually ten, fifteen or even twenty years.  Do you want to be in a business relationship with this person for that length of time?  As tempting as it may be to sell your first franchise, recognize the power the Franchisee will have over your success as a Franchisor.

When we are in the franchise planning stage, I strongly recommend to National Franchise Associates’ clients that they do their best to verify what prospective Franchisees tell them.  You must be able to trust your Franchisees, and it is far better to know up front whether you can.  This is another key to successful franchise planning.