Franchise Help: How to Hire a Good Franchise Consultant

It is often reported that a good franchise consultant can reduce the amount of effort that is needed to make key decisions in a business deal. These consultants provide franchise help and can really uplift the speed of the process. However is it really necessary for a franchiser to spend the valuable money to hire a consultant? Are there any other alternatives? This article separates the truth from the fiction and highlights some of the misconceptions!

What Benefits do Franchise Help Bring for Businessmen?

During a franchising deal, buyers and sellers often require objective opinions about many particular matters. A fair assessment of the current deal is required at all the stages and an expert can really make a key difference. It is customary about these consultancy companies that no amount is charged on their first visit. However with the passage of time businessmen start to worry about huge fees that these companies charge even for some minor trivial task. Franchise help that these companies offer soon turn out to be a very costly option for a deal.

If Hiring a Franchise Consultant is Costly then What Should You Do?

There are other options that remain available for franchisers to get rid of costly consultancy offered by the experts. Online manuals that provide concise and accurate information are replacing the old office based consultancy companies. You can get an authentic Franchise Operations Manual that will make the decision making a lot easier during a deal. This manual not only saves valuable money but it comes with 100% FTC certification to guarantee supreme quality of franchise help.

FDD documents that are prepared by the consultancy companies in return of huge sum of money are now available through an online template. You can download customizable Microsoft Word Franchise Disclosure Document (FDD) Template for very decent rates. Through this template businessmen can easily create an original document in a very short time without compromising the quality of content.

Franchisor Responsibilities or What Your Franchisees Expect

Franchise business is unique, different than any other type of business. Almost all of the aspects of franchise business must be looked at from a slightly different angle. Along with all specific diversity, there is also a significant difference between the expectations of franchisors customers (the franchisees) and the customers of any regular business. Meeting the expectations of your customers is of paramount importance to any business owner.

There are many guidelines that one can follow in order to perfect their company’s customer service. Yet again a franchisor’s responsibilities towards their franchisees often go beyond standard customer service. What a franchisee expects from a franchisor is definitely not what a regular customer expects from a service or a product provider.
Good relationships between franchisors and franchisees are one of the keys to success for any franchise business. Often the reasons for problems in this aspect are connected with the franchisor failing to meet franchisees’ expectations or failing to be responsible for the things they must be.

Franchisor responsibilities guide & tips

• Any franchisor is ultimately responsible for setting good business foundations. As a franchisor you must make sure the system you have established will be profitable for your franchisees as well as for you. If you fail at this initial state, it is very likely that your franchisees will fail too.
• Franchisors are responsible for the development and execution of national and/or local marketing strategy and communicating them to their franchisees. Although your company policy may include or allow advertising campaigns to be initiated by your franchisees, it is up to you to take care of the overall marketing plan and advertising campaigns.
• Brand management is another responsibility a franchisor has. How the brand will be developed, what trademarks will be used, maintaining and protecting the company identity is ultimately a responsibility of the franchisor.
• Territory protection may be or may not be part of your franchise policy. Whatever the case, make sure your franchisees are well informed prior to signing the agreement. Many franchisees expect territory protection and assume the franchisor would take care of this. Since territory protection is not part of any franchise business strategy you must clear this issue well in advance in order to avoid misunderstandings later.
• Make your potential franchisees well aware what type of training and support will be available to them. Be specific and describe in details when and how initial or any ongoing training activities will take place; what training materials will be provided to the franchisee and so on.
• One of the common reasons for disappointments is not because the franchisor is not being responsible for the things they should be, but because the franchisee expectations are unrealistic. Avoiding such situations is easy provided that the franchisor make sure every is well explained and incorporated in the company documents. Take the time and go over each point with a potential franchisee. Make sure their expectations are set to the correct level prior to signing the agreement.

When Professional Franchise Consultancy is Required?

Franchise consultancy is available for every aspect of any franchise business. There are professional franchise consultants who not only can help you analyze whether or not your business is suitable to transform into a franchise, but can also lead you during every step of the way.

Many franchise owners start their franchise businesses all by themselves and often underestimate the benefits that a professional franchise consultancy can deliver. In many of the cases this is driven by the common conception that consultancy services are expensive. Another common school of thought follows the concept that it is simply impossible somebody, who doesn’t know your business to advise you how to set it up and run it.

In fact franchise consultancy can be quite helpful and it doesn’t necessarily cost a fortune. There are hundreds of examples of successful franchises that are so successful because they could rely on the services of experienced professionals.

Why you may consider hiring a professional franchise consultant?

Business owners who are interested in transforming their business into franchise may consider the services of a franchise consultant company. Franchise start up consultants will be able to analyze the current condition of the business and whether or not it is suitable to become a franchise. Having such advice early on not only can help to place the foundation to a very successful franchise but can also save you from bankruptcy in case your business doesn’t fit into the franchise concept.

Many franchisors risk to be put out of business soon after they have launched their franchises simply because they have failed to set their franchise fees and royalties accurately. While this particular aspect of franchising is not rocket science, still some knowledge and experience is required. And it is another area where franchise consultancy can be very useful.

Once your franchise is talking of, you may want to consider more aggressive expansion. Even if you want to keep a slower growth pace, you will need to carefully monitor and adjust your marketing strategy. Your business can be down overnight if you fail to develop a good marketing plan. There are many franchise marketing consultants that can help you in this area. Their services are very handy not only for devising a better marketing and advertising plan, but for making sure your marketing and advertising meets the state and federal franchise laws.

As a franchisor you know that the relationship with every single franchisee is of utmost importance. Even if you have managed to handle the few franchisees you have had at the beginning, a rapidly growing number of franchisees can quickly lead to problems. Communication problems, unless you know how to handle them, are underwater stones that lead to problems in the long run. Franchisor – franchisee relationships is an area where consultancy can help. It can show you the secrets to good franchisor – franchisee communication and can help you set your company policies into the right direction.

Creating a Successful Franchise Marketing Strategy

One of the most important jobs of franchisors is to create and maintain a successful marketing strategy. A well though marketing plan may mean the difference between a prosperous business and bankruptcy. Developing a good marketing plan doesn’t necessarily require a lot of money. You may need some professional advice and guidance (BIA/Kelsey advisers may be a good help) especially if you do not have any previous experience in creating full marketing plans, but you can still get most of the work done yourself.

Issues to address when preparing a franchise marketing plan

The first thing that you need to keep in mind when creating your marketing plan is your goal. Knowing and picturing what you would like to achieve in one, two of five years will give you the clue of how to write a good marketing plan. Are you looking to establish your franchise locally or you are looking for nationwide or overseas expansion?

Identifying who your potential franchisees are is also vital. Knowing who your customers are will help you target your marketing activities into reaching the optimum number of sales. It will also help you establish reasonable franchise fees and royalties. You can research other franchise businesses offering similar products and services and see who their franchisees are.

Your marketing plan should include a great advertising strategy as well. There is a significant difference between advertising a franchise and advertising any other consumer targeted business. Often DYI franchisors fail to prepare good advertising plan just because they do not have the knowledge and the experience. You can either hire a professional franchise advertising consultant company. There are also some legal requirements that must be met in order to stay out of trouble.

Set a budget and stick to it. Working within strictly defined financial borders may be crucial for success of your business. Many franchises fail because they try to compete directly with large and well established businesses offering similar products or services. I fact you do not need to match your marketing budget with their in order to achieve great results. Work on product differentiation instead and try to find unique ways to promote your franchise.

Once you launch your business, try to gather as much information as possible from your franchisees. This will give you plenty of ideas how to develop your marketing strategy further.

Franchisor vs. Franchisee – Should it really be a this way?

All fresh franchisors start with optimism and faith. They believe the relationships they are going to establish with their franchisees will be perfect. They are confident that whatever troubles will arise, will be quickly addressed and resolved in the best possible manner. I doubt there is a franchise business owner who pictures poor communication between franchisees and franchise management and units closed after court fights.

On daylight things start to look different. Many franchisors soon realize they are unable to serve their franchisees the way they have originally planned. When the franchisee number starts to grow, things just take a turn into the worst. Now franchisors need to work with much more people, solve much more problems and be more flexible. And let’s face it – not everyone is up to this challenge. Many find themselves stuck into a vicious cycle of problems; they cannot stop their growing business and they cannot solve the issues that are piling.
Luckily there are several easy steps that every franchisor can take to reduce the chance of finding themselves into the above scenario.

How to solve problems before they have occurred?

• Be firm but fair. Once you set the basic foundations of your franchise business, stick to them. You will be exited when the first potential franchisee knocks on your doom and you may be tempted to do some tweaks on the operational manual or to adjust your fees just to make sure you will land the sale. Ask yourself – could you do so if you had 100 franchisees? Could you reduce your fees or royalty payments every time you want to land a sale? The answer is no, you cannot, because your business will fail. You must take into consideration the specifics of each sale but your decisions must be economically and not emotionally driven.
• Communicate. Every successful relationship between a franchisor and their franchisee is based on good communication. You may find it difficult to keep up with this once your franchisee number increase, and this is why you can set some standard procedures that anyone working for you can follow. Other times you may not want to communicate as the relationship with one of your franchisees has started on the wrong foot. Whatever the case you must try to make things work and you are the one who should initiate the communication process.
• Be patient. Sometimes it may seem that a franchise unit you have just sold is not performing according to your expectations. Instead of reaching out to call your attorney, stop and check if your impressions are really true. Review the franchisee balance sheets and meet the owner. May be you will really find a reason to worry or maybe you are just being impatient and unrealistic. Set a system (if you do not have it in place already) that will automatically alarm your financial department if the things are not going according to plan with any of your franchisees.

Facing New Franchisees

Signing new franchisee contracts, expanding the business at a fast pace looks quite exiting to everybody looking at franchise business. It is definitely exiting. However only franchisors know how many long hours they have invested in finding potential franchisees, how hard it was to land every new sale and how much more work is out there in keeping their franchisees happy and successful.

Franchise business, as easy as it seems, is not for everyone. Certain people just do not fit to be franchisors while others cannot manage to keep up with the effort required to get into the business and develop it into a prosperous empire.

One of the most difficult challenges every franchisor faces is convincing prospective franchisees that opening their franchise unit is a lucrative opportunity. The situation is complicated additionally by numerous Federal and state regulations that restrict franchisors to discuss certain topics with their franchisees prior to signing a franchise agreement. Here are a few of the questions a potential franchisee may ask you.

Frequently asked questions by potential franchisees and how to answer them.

• What profits I may expect after signing up with your franchise? Be very careful if you are asked such question as well as any question regarding money, revenues, profits or other financial matters. Federal and state regulations strictly forbid discussing potential revenues and profits with potential franchisees. Make sure your staff is well trained in this respect as failing to comply with franchising laws can end up in thousands of dollars in fees and even some personal penalties.

• What kind of support you provide your franchisees? Your prospective franchisee is looking for security. It is normal that they are concerned about the training and support they are going to receive. Do not underestimate this question as whether or not you will sign a contract may depend on your answer. Explain in details what training programs are available for your new franchisees and their staff and what support you are going to be providing them with along the way. Hand over some informational materials for further reading and leave a contact number for any future questions.

• What future equipment upgrades are you planning to have? Your prospective franchisees are aware of the fact that you have an ongoing fee for upgrades and improvements and want to know what they will get in exchange for their money. Even if you do not have such a fee, a future franchisee may still want to know what they will expect in terms of upgrades and in what timeframes. Transparency is the best policy here, even if you do not have planned any technological or equipment upgrades in the near future.

• Why I need to pay an initial franchise fee? Initial fees are, in eyes of people, a great deal of profit for franchisors. As a franchisor you are more than aware of the fact that this is not true. If you have an initial franchise fee, explain that it is there simply to cover your expenses for getting each sale.

Challenge Your Franchisor Problems

Every day thousands of franchise owners experience the same problems and worries. Some of these challenges are pretty easy to overcome while other require a serious approach and hard work.

Detecting a problem is always the first step required to successful solution. Many franchisors fail here – they are either unable to detect the real cause for the problem or don’t address it in an appropriate way. Here is a selection of some of the most notorious franchisor problems along with the most appropriate solution for each one.

A list if franchisor problems and how to challenge them.

• Royalties payments. Many franchise business owners find it really difficult to control their royalty payments. Usually they need to way until the end of time, see the sales information of each store, calculate the royalties and than wait for payments to be made. If there is a large number of units, checking them all may really become problematic. A good way out of this is to try systemizing and unifying things as much as you can. Start to use software that will help you compile sales data and track payments.

• Communication. Often franchise owners feel their franchisees are reluctant to communicate effectively. Even if they can sense the problem, it is somehow impossible to open a good line of communication with the franchise unit owners. This problem can quickly lead to a business disaster. The solution is quite simple. You should train all your personnel to be able to detect some of the most common problems a franchisee may experience and approach them for a discussion and advice. If this doesn’t work you should be able to step in and open a conversation with any of your unit owners. Another approach is to use the services of a franchise counsel. These services have becoming very popular and they can really help when communication issues appear.

• Poor sales. If you detect that the sales of any of your franchisee have dropped, you need to step in and take action right away. There may be several reasons why this particular unit is not performing. The reason may be connected with competition, with poor customer management, poor product quality and so on. While the competition factor is somehow hard to tackle, the other two reasons actually point to incompliance with the franchisor operations manual and your business practices. Don’t jump to any conclusions before you reach the root of the problem. For example if your franchisee has lowered customer service, you need to try to understand what led to this situation rather than just shut the unit down.

There are much more potential problems a franchise owner could face. Rather than seeking ready made solutions, franchisors should learn how to prevent problems from occurring and how to tackle the issue in the best possible way. The strongest weapons in battling problems are the ability to detect problems early on, to teach your team to take action as soon as the problem arise, help all franchisee unit to perform as best as they can.

How to Write a Franchise Operations Manual

The franchise operations manual is one of the most important documents for any franchise business. It can make the difference between a successful and profitable franchise and a poor performing one.

Writing your franchise operations manual can be a frustrating task, especially if you are new to this business. Here are some tips that can help you throughout the process.

Franchise operation manual tips:

• Get ready. If you have never written a franchise operation manual, you will need to get familiar with the document prior to writing one. Of course every business is unique and there are different business procedures in every company. However you do not need to get into details at this stage. All you need to do is to get familiar with this type of documentation. Find as many operations manuals as you can and read them carefully. Pay close attention to their structure, the information listed and make notes about the most important details. Try to get franchise operations manuals of successful franchises and such that have businesses similar to yours.

• The first draft. After you have an idea what a franchise operation manual is you can proceed to writing the first draft of your own manual. As you have already noticed, the manual can be a bulky document so you will probably need a lot of time outlining all the information and even more time writing the details. This is where a specialized franchise tool can help you. There are some great software products that can provide you with the main frame of your manual. If you choose to use such software, all you will need to do is to customize the ready template.

• Get the draft reviewed. Once you have your franchise operations manual draft ready, you can get it reviewed by other members of the management team. Your management team is the people who know most about the business and each member of the team can contribute to the writing process. In addition, having the manual read by many people will help you a lot in refining it and making it better.

• Get the second draft reviewed by professionals. Once you have an almost ready version of the manual, get a legal professional to review it. This is very useful especially in cases when you are aiming to get franchisees from many different countries. A legal processional specializing in franchising will be able to point out any weak sides of the manual as well as fill any holes that may arise from a legal point of view. You can also get a franchise consultant to review the manual. This step is recommended especially if it is your first franchise business and this is the first time you are preparing such document.

• Make it official. Once you have the second draft ready, apply the final corrections and make the official version of the franchise operations manual. Remember that you may need to review it and change it on a regular basis as your business develops and the market changes.

5 Steps to Help You Expand Your Franchise Business

Establishing your franchise business, assuring its smooth operating and profitability is definitely a challenge. Expanding it to its optimum limits however is what many dream of since day one. How you can expand your franchise business and bring in its optimum amount of franchisee units? Here are five easy steps that can help you out through the process.

How to expand your franchise business:

1. Review your current situation. The fact that your franchise business is running smoothly with the current number of franchisees that you have doesn’t necessarily mean you are ready to expand your franchise business. Review all your documents and make sure they can hold the pressure of a larger number of units. Remember – controlling the operations of a few franchisees is absolutely not the same as controlling a big network of units. Double check all your legal documents and operational manuals and make sure there are no gaps in any of them.

2. Are you ready to compete? Once you make sure your business has the stable foundation to expand, check your competition. Having a small, local franchise business differs drastically from having a large, national or international network. Is your branding name and logos good enough? Are the products or services you sell competitive enough? Can you do better? Are your branding materials and products suitable for the new markets you are aiming at (especially if you are going international)? Getting these issues sorted out was crucial when you were launching your business and they will be crucial when you decide to expand your franchise.

3. Money matters. Money is always an issue to address. You may not need the same amount of money that you needed when you first started, however getting new business will require some additional expenses. In addition you should plan ahead any future expenses for extra office or storage space, new employees and office equipment and so on. If you don’t have enough resources to support an expansion check bank loans way in advance.

4. Set goals. Set realistic goals about how your franchise business will expand. How many new franchise units you want to have opened by the end of the month? After 3 months? By the end of the year? A goal orientated attitude will not only provide the frame for your expansion but will help you quickly review your progress. Remember – you must be realistic in your expectations and set realistic goals.

5. Push on marketing. Once you have all well thought of and prepared, push on your marketing. Your marketing efforts should be consistent with your expansion plan. Advertise in areas where you want to get new business, think of clever ways to get to your prospective partners. Good advertising strategies not always require fat marketing budgets so try to be creative and inventive rather than pour hundreds into traditional marketing. If you feel this is a hard task to do yourself, get an experienced marketer to help you set things up.

Franchise Renewal Agreement

Is it that time of year again? Often it’s a time of celebration with your franchisee, marking another solid year of continued growth. If it has not been stellar, prepare to hear all about it.Then again, this is a time of rebirth and renewal and there may have been some changes you would like to see in current and new franchisees. Take this time to reflect on what you want to change and then make it happen. The real power lies with the current franchisees who have a large stake in the organization. Changing things now may upset them or empower them – you may want to talk with them in a focus group setting or simply one one one over the phone – or better yet – over lunch, your treat.

Whatever the venue, the power is in the paperwork. What is promised to one must be afforded to the other. So it is with all contractual paperwork. The tough part is hammering out all of the same documents but feeding different names in each caption. This can be done with a mail merge type macro but I found it is easier using a simplified franchise system. The first step of course is to consult your franchise attorney about any new changes to the business – making sure you can make these changes will be key to franchisee survival and renewal. Making those changes and getting it all down on paper is often the tedious part, what with copying and pasting nonstop. Then again a software application like FranZoom’s Pro Bundle offers the ability to simply type and print – to all franchisees. Thus saving you time and money from having to edit each individual ones address, franchisee number and franchisee location.

Once you have all of your contracts in order its best to contact each franchisee personally and let them know the changes that are forthcoming. Surprises are great for birthdays, not so much for business. Your franchisees know their rights and must be assured that staying with your franchise system is a more viable option than being forced into a non-compete clause.

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