In my over three decades of experience as a franchise consultant, I am often asked, “What are some of the most important keys to success when franchising a business?” In my opinion, it is essential that, when franchising a business, you put some careful thought into developing a franchise support system for your franchisees.
The first reason to provide support to your franchisees when franchising a business is financial. Most franchisors earn the majority of their income from the royalties paid by their franchisees. These royalties are usually a percentage of the franchisee’s gross sales. When franchising a business, typically, the more support you supply to your franchisees, the more successful they will be and the higher their gross revenues will be.
Therefore, the better you are at supporting your franchisees, the more money you will make as a franchisor.
Always bear in mind when franchising a business, the success of the individual franchisees hugely influences your ability to sell additional franchise locations. If your first few franchisees do not succeed, it will be extremely difficult, if not impossible, to sell additional franchises.
Almost every article or book on buying a franchise advises that after speaking to the franchisor, a person interested in purchasing a franchise should talk to some existing and former franchisees. This process is made easier because franchisors, when franchising a business, are required by federal regulations to list in their Franchise Disclosure Documents both their current franchisees and also any franchisees who have left the program in the previous year.
To the team at NFA, this is one of the most meaningful requirements in the Federal Trade Commission’s Rule on Franchising. It gives a prospective franchisee the opportunity to get input from both sides before coming to a decision. It also makes it incumbent upon franchisors to provide genuine support to their franchisees and to meet their commitments to their franchisees when franchising a business.
Thinking About Developing a Franchise Support System?
NFA Franchise Consultants have the experience to help businesses franchise. Just watch and listen to some of our client case studies and video testimonials. We can HELP YOU and it doesn’t cost anything to call and talk to us!
So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form. We look forward to helping you take your business to the next level and beyond.