Should Franchisors Provide Business Plans to Franchisees?

January 3rd, 2012 by admin No comments »

Most franchisors have highly sophisticated and efficient business models. Indeed, I highly doubt you need to read Michael Gerber’s “E-Mith” to figure out why. If you look at any franchisor’s confidential operations manuals, you will see thousands of pages of exactly how to run that business, they don’t skip any key considerations and they haven’t missed anything. Franchisors with thousands of franchised outlets have their business model so refined, and so figured out, that all the mistakes and inefficiencies are completely built out of the business.

In fact, if you follow their business models to a “T” what you will find is that it is nearly impossible to fail. And I say “nearly impossible” because there are some who could fail at anything. Now then, there is a question I was recently asked, because I am a former franchisor founder and now retired; the caller identified himself as a franchisee of a two-year-old franchising company; “Should franchisor provide franchisees with business plans?” Apparently, his franchisor did not provide him with a franchisee business plan, only 2500 pages worth of confidential operations manuals.

Nevertheless, it is my contention that yes franchisors ought to provide business plans for their perfect franchised outlet store models. A business plan is a lot different than merely a “how to” step-by-step guide or manual. Now then, I wouldn’t recommend a franchisor provide such tools for new franchise buyers to look at prior to their purchase because that would be like giving away the whole store, and could interfere with “earnings claims” strategies to comply with franchise regulations.

However, once the franchisee has bought the franchise, yes, they should be provided with a business plan, almost immediately before they do anything else, and they should read it and understand it. It ought to be an attachment to the company manuals, and something that the new franchise outlet owner becomes intimately acquainted with. Well, that’s what I think, and I hope you will please consider this.

By Lance Winslow

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Franchising – Planning on Starting a Profitable Business?

January 2nd, 2012 by admin No comments »

If you are planning on starting a profitable business, make sure to review some basic principles of start up success. Plus, consider investing in a franchise to make the process easier.

It is easy to start a business; but it is much harder to actually make a profit from it. Ability to research and persistent due diligence are key to identifying that money making venture everyone wants.

Fact is, franchising can take away many of the risk factors of an independent start up by making the key elements of due diligence easier.

When evaluating the potential profitability of you business, review and evaluate the following areas of your potential venture.

Remember, the following applies to both the franchises and the independent start ups:

Demand

Is there a demand for specific products or services in your community? Is the demand seasonal?

For example, lawn and garden care or swimming pool maintenance may be profitable only in the spring or summer. Is there likely to be a continuing demand for the products or services in the future?

Is the demand likely to be temporary, such as selling a fad food item? Does the product or service generate repeat business? Is there potential to sell membership type services?

Competition

Unless you have a unique idea, your road to starting a profitable business will likely involve taking customers away from somebody else. What is the level of competition, nationally and in your community? How many competing companies sell the same or similar products or services?

Are these competing companies well established, with wide name recognition in your community? Do they offer the same goods and services at the same or lower price?

Your Ability to Operate the Business

Any business has a potential to fail. You need to consider that possibility during your planning process. Do you have the proper educational background and/or experience for this business?

Do you have enough financial resources to invest in marketing or to survive a downturn in the economy? Could you conduct the business alone if you must lay off personnel to cut costs? » Read more: Franchising – Planning on Starting a Profitable Business?

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Strategic Planning For Mobile Franchise Outlet Territories

January 1st, 2012 by admin No comments »

Running a National Franchise Chain is not easy, and I can definitely attest to that. Still, I had it easier than most since our franchise system was indeed a “mobile type of business” and thus, it was a rather simple business format. And yet, nothing is never as easy as it seems, is it? There is a lot of strategic thinking and yes, planning that goes into serving a large number of markets with mobile franchise outlets and operations.

Interestingly enough, many folks that looked at our operations and franchising company considered us to be a sales organization, selling accounts and selling franchises, but I never saw what we were doing in this way. Was it one of our core strengths? Well sure, you see in franchising you have to be good at everything you do otherwise no one will want to own the franchises and their customers, the end users will not partake in your services or products.

In walks Strategic Planning

One of the most important aspects of planning in a mobile franchising company is insuring that the territories which are granted do not conflict and give adequate coverage to service the target market segments and yet, avail themselves coverage for future markets segments, some of which are unknown in the present. Ah, you can begin to see the challenge.

One must never forget that when it comes to distributing services to customers, that travel times, fuel costs, and labor costs while in transit to perform services are critical. And when setting up franchises, remember too that each franchisee needs to retain a profit because if they fail you have instant and immediate crisis, as the coverage has holes in it. Strategic Planning in mobile franchise territory allocation is thus, paramount. So, please consider all this.

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