Selling Franchises

There are two aspects to selling franchises. The first one involves doing everything reasonably possible to get the attention of prospective franchisees and then vetting them to ensure that you end up with the best qualified franchisees. The second involves actually providing the prospective franchisees with the requisite information, signing documents and completing the monetary transactions that will undergird the franchisor-franchisee relationship. The first is tremendously challenging, but once it is achieved, the second is comparatively straightforward.

Tracking down potential franchisees and convincing them that buying a franchise would be the fulfillment of one of their lifelong dreams is not a remotely easy endeavor to take on. Many first-time franchisors can likely attest to having waited more than one year before they managed to sell even one franchise. This is illustrative of the fact that franchise companies do not simply build themselves. However good a franchising idea you have, you will not go anywhere with it unless you are willing to undertake the research to find out whether there is a market for the goods and services you propose. Additionally, once you have established that there is indeed such a market, you should be willing to make the effort to promote your franchise company to potential franchisees with the aim of selling franchises to them.

 

Selling Franchises with Targeted Advertising

 

Promoting franchising opportunities can be highly expensive. If you choose to follow the normal media route, you will have to pay the high rates associated with advertising on the TV or radio or with taking out an advert in a regular newspaper. The problem with these forms of media is that, not only are they expensive, but they also reach a broad, undifferentiated audience. This is an inefficient way of advertising if you want your message to reach people who are actually likely to become franchisees. This problem can be remedied by putting advertisements which indicate that you are selling franchises in targeted advertising. In other words, you should place your adverts in places where entrepreneurs and potential franchisees are bound to look.

These places include business magazines which cater specifically to business-minded audiences. They also include online directories specifically set up to include franchise companies that are currently selling franchises. A franchisor’s best bet is to have his or her franchise company listed in the more popular directories, along with the contact information of those who are interested in learning more about the franchising opportunities. Yet another option is that of targeted advertising on the internet. This could involve paying to advertise on franchising-related websites and on social networking sites like Facebook.

Franchisor Mistakes: How to Avoid Making Them

Most first-time franchisors are unable to turn their independent businesses into successful franchise businesses. Much of the time, this is because of franchisor mistakes that they make along the way. To avoid falling into the same trap, you should tread carefully during the planning and implementation stages of franchising.

One of the significant franchisor mistakes that franchising experts describe is that of inadequate planning. Some franchisors fail to do their homework before making important decisions about the running of their franchise companies. For instance, they may fail to accurately calculate just how much money they will need to get the franchising show on the road. Various expenses come into play at many stages in the process. They include legal fees, fees for developing and producing marketing materials, and various other expenses associated with developing the franchise organization.

Other aspects of planning go into franchising. They include decisions about the fees and royalties that the franchisees will pay the franchisor.  Determining what to charge your franchisees is not a decision that you should make on a whim. You have to figure out how much money you will need your franchisees to pay you in fees and royalties in order for you to meet all your financial obligations and to succeed as a franchisor. If the figures you come up with are too low then you could easily end up losing millions of dollars in potential revenue. These losses could ultimately cost you your franchise business. Thus, neglecting to devote adequate time and effort to the different terms of your relationship with your franchisees could result in a number of franchisor mistakes.

 

Franchisor mistakes that antagonize franchisees

 

Among the major franchisor mistakes is one involving failure on the part of the franchisor to recognize that certain business decisions will set him or her at loggerheads with the franchisees. The aim of franchising is ultimately to make money. Any decisions made by the franchisor with the intention of increasing his revenue are not going to go down well with the franchisees if they require some losses on their part. You should keep this in mind as you go about the daily operations of your franchise.

You should recognize that there is potential for conflict between you and your franchisees and make an effort to minimize that conflict by laying the terms of your franchise business out clearly right from the beginning. You should also have in place provisions for conflict resolution and, in the worst case scenario, for terminating dysfunctional franchisor-franchisee relationships. Last but not least, you must realize that one of the keys to franchising success is nurturing your franchisees and ensuring that they succeed. If your sole agenda is to reap profits by fleecing your franchisees, you will only succeed in antagonizing them and undermining your entire franchise system. If, however, you create an environment in which they can thrive, you will ultimately reap the monetary rewards.