What are the critical elements necessary to turn a flourishing business into a successful franchise model?

When it comes to launching your own franchise-based operation the strength and quality of your initial infrastructure and people cannot be understated, according to Rod Laycock, CEO of Civic Managed Services. .

Laycock has spent more than 30 years in franchising with some of the biggest franchise brands.

“You are building, and delivering, not just an exciting opportunity for franchisees, but encouraging them to take a real leap of faith in professional trust and experience, and this is where it’s critical you deliver,” he says

So what are the critical elements required to transition a successful business into a moneymaking franchise model?

• Having a unique and consistent product or service.
• It needs a sound business system that can be duplicated.
• The investment requirements need to be sustainable.
• The franchisee needs to be able to get a reasonable ROI
• The franchisor needs to have the resources to support the franchise network.

WHERE DO YOU START?

Any good franchise system lives and dies on a consistent and reliable product or service. So the first step in determining whether a product or service can be franchised is ‘can it be produced by a franchisee, to a consistent high level of quality?’ Once you can confidently answer this question, you have something that is able to be franchised.

The product or service needs to meet high standards of delivery and be consistent. The perfect example of this execution is McDonald’s; we may not all think that they have the best burgers in the world but wherever you go internationally, you know you can expect consistent, clean, and a safe food experience that is familiar and delivered to a high standard of quality and service.

REASONABLE INVESTMENT FOR A SUSTAINABLE ROI

Investment and ROI are inextricably linked, and both are of critical importance for a new franchisee as well as for the success of the franchisor.

If the initial investment in the business opportunity is too high, then the ability of the franchisor to achieve a critical mass of franchisees will be made more difficult. Similarly, if the franchisee cannot achieve a reasonable return on their investment within a reasonable time frame, then the business opportunity will fail to attract suitable investors.

Naturally every business model will be different, but the critical factor is that a franchisee/investor can identify that the franchise system will assist them to run a profitable and sustainable business.

MAKING SURE YOUR SYSTEM IS SOLID

The most amazing food can be generated by the world’s masterchefs, but without a step by step guideline and blueprint, no one else can produce the same result. This blueprint is critical for a successful franchise system – your operations manual.

The IP contained in the operations manual is one of the key elements that will give any franchise system its value. By following the operations manual the franchisee has the greatest opportunity to achieve success. This contains all of the intellectual property required to deliver a consistent product or service in the manner which the founders expect. Unless a business’s processes can be corralled into an operations manual, the business will be very difficult to franchise.

THE CHALLENGE OF GROWTH

The greatest challenge for new and emerging franchise systems is having adequate and appropriate resources available to support the early franchisees that are attracted to the model.

This is a real conundrum as the franchisor wants to grow the system quickly to achieve a critical mass of franchisees, which in turn provides the revenue stream to allow the franchisor to further invest in human resources and continue the growth of the system.

The reality is that many franchise systems begin under capitalised with human resources and as a result, they struggle to support the initial franchisees in the system and it becomes a challenging game of chicken and egg. They can’t afford a full support team from day one, but without it, the early franchisees don’t get the support that they deserve.

ENSURING YOU ARE AHEAD

There are many organisations out there fulfilling the role of franchise service providers and particularly in the disciplines of legal, recruitment, marketing, PR, and finance functions. Most of these external support resources are aimed at solving short term needs of businesses during their formative years. What’s missing is a service that works in collaboration with a franchise system to incubate its early development and then continue to support and nurture the business as it grows.

It is this niche in the business that has motivated Civic Video to take its 30 plus years of experience as a franchisor and evolve the team infrastructure into a new entity, Civic Managed Services, as a mentor for any emerging businesses.

Civic has leveraged its extensive experience to provide a full suite of support services to resolve the dilemma faced by emerging and new businesses and franchises with strategic management and planning, supported with traditional and digital marketing, finance and admin, payroll, IT, purchasing and procurement, warehousing and specialist franchise admin and support, for the nominal cost equivalent to a few heads in the business.

TOP LINE ADVICE

So what’s the immediate advice to a business moving into the franchising world?

Make sure your framework and team is solid. By that we mean your team, internal infrastructure, support systems, documentation, financial reporting, operational procedures, and communication lines are all functional and in sync.

A well-coordinated team is critical to fast-track those franchisee results everyone’s after.

Civic Managed Services is the parent-arm of Civic Video and provides a full suite of business management services