Building a highly successful franchise system is the goal of every franchisor. Yet, for some franchisors, those visions never become a reality.
Not every franchise concept is destined to thrive. However, franchisors who understand the challenges they face can develop effective strategies for overcoming or avoiding the obstacles to successful business expansion.
No. 1: Having Enough Capital to Sustain the Franchise System
Many franchisors underestimate the amount of capital they’ll need in the beginning. The reality is that the costs of franchising a business and supporting new franchisees can exceed the profits from royalties and franchise fees for at least the first year.
No. 2: Creating a Solid Franchise System Infrastructure
Franchisors often fail to establish franchise procedures, systems and support processes before embarking on business expansion. Without a solid infrastructure, franchisees can’t get the assistance they need to become successful.
No. 3: Bringing the Right People to the Franchise Team
Not all franchisors take enough time to hire the right employees for their franchise team. Finding team members who effectively represent the company’s core values isn’t easy, but it’s a must for franchisor success.
No. 4: Finding and Attracting the Right Franchisees
Long-term success for a franchisor depends largely on the quality of their franchisees. And today, recruiting well-qualified franchisees often boils down to money — the cost to find and attract candidates who are willing to invest can run into the thousands.
No. 5: Developing Solid Relationships with Franchisees
It’s not enough to recruit the right franchisees. Ongoing support is essential, and franchisors who don’t build strong relationships or treat franchisees well have less of a chance for success.
Tips for Building a Successful Franchise System
If you’re thinking of entering the world of franchising and want to set yourself up for success, don’t try to go it alone. Working with an experienced franchise attorney can help you establish a strong foundation for business expansion.
In addition, make sure you understand your role as a franchisor. Running a business is very different from working as a franchisor, and if you want to be successful, you’ll need to focus your attention on finding, training and supporting franchisees.
Furthermore, to be a successful franchisor, you’ll have to commit to adapting your franchise system to meet the ever-changing market. While the basics should be nailed down before you launch any franchises, you should always look for ways to improve.
Are you ready to expand your business? Having an experienced franchise attorney at your side can make all the difference in your success. The Franchise & Business Law Group can help you achieve your business expansion goals.
The Franchise & Business Law Group offers client-centered, forward-thinking advice on navigating the hurdles of franchising. As the leading franchise and business law authority in Utah, we have the knowledge and legal expertise to put you on the path to becoming a successful franchisor. For expert assistance building your franchise system, contact our Salt Lake City office today and schedule a consultation.