how to franchise your business

How to FranchiseYour Business

Speaker:Tony Fitzpatrick

 Managing Partner

www.franchiseyourbusiness.ie

What is a franchise?

A franchise is a licence to use a proven business system, its brand identity, its operating procedures, marketing procedures, advertising procedures, training programmes and its support framework.

What is a franchise?

The franchisee’s own personal flair, theirunique entrepreneurial skill, energy andcommitment are added to reap the full benefits of the franchise. Studies show at more than 90% of franchisedbusinesses are successful compared to 55%of non-franchised business set ups.

Terminology A Franchisor is the original developer of the

business

The Franchisee is the investor who buys the right to trade under the brand using the Franchisor’s concept

FranchisingSome of the world’s most successful companies are franchises. The owners realised that franchising offered key benefits such as:

Unlimited growth potential, attracting franchisees instead of hiring employees

Expansion without huge bank borrowings, or having to share equity

Long term stability and predictability of the business model

Rocketing revenues

Boosts the value of the business

Franchising The USA has 2,000 Franchisors. A new

franchise opens every 8 minutes of every business day

1 in 12 retail outlets is a Franchise, generating 18 million jobs and an annual payroll of $500 billion

The industryaccounts for 40% of all retail sales in the USA

Franchising The number of Franchisors in the UK

exceeds 1000 with 35,000 Franchisees employing 333,0000 people and generating annual sales of £13.5 billion.

The Lebanon has 150 Franchisors

Franchising

Franchising provides an opportunity to work for yourself, but not by yourself. By owning an operating a franchise you are investing in a proven method of doing business where all the problems associated with start up business have already been ironed out.

FranchisingFranchising provides a proven system to follow.That’s S.Y.S.T.E.M as in “Save Yourself Time, Energy and Money.”It gives a structure to follow. Franchisors can only be successful if their franchisees are successful. This makes for a win-win relationship that is unique in the business world.

The Market for Franchisees

 Thousands of people are looking to start their business, be their own boss, and pay themselves what they’re worth. They include:

People who have been made redundant Current employees Second incomes

RedundanciesDramatic effect of recession. Large numbers of people losing their jobs. They can:

Stay unemployed Start a business, or Buy a franchise

Many of these people lack the skills or confidence to start their own business. Only alternative is to look at franchising.

Second incomes

Big increase in the number of people unable to work full-time but need additional income because partner lost job or family income has been reduced.

Franchising can solve their financial problems.

Current employees

Job security is history. Wages and bonuses are reduced. Any job is at risk. People look to control their own destiny and franchising can be the answer.They can be their own boss, work what hours suits them, and benefit directly the more successful they become.

How you make money from Franchising

Mark up on product you sell to franchisee Percentage of franchisee’s gross sales Flat monthly fee

What you need

Essential documents are:

Franchise Agreement

Operations Manual

Is your business suitablefor franchising?

Ask yourself these questions: Have you run a successful business for at

least one year and preferably two or three?

Have you proven your concept? Will it survive in the long term? Is it profitable?

Can you produce audited accounts? Do you operate in a niche market or offer

something different in an established field? Can your business be replicated and easily

taught? Can you offer leadership, strong

management, motivation and support?

And …

Can you offer a franchise at a cost that is good value for money and can make a decent return on investment in the short to medium term and a good living for its owner?

Benefits of Franchising

As a franchisor you can expand your business - and your income - more rapidly and at less risk using other people’s money. When you award a franchise you are creatingan income stream from royalties or management fees for the foreseeable future.

Benefits of Franchising

Profits are higher because your costs arelower.

You’re working with motivated businesspeople who will bring creative, innovativeideas to the franchise.

The psychological element…

You are helping others to achieve their dream of achieving financial independence by showing them how to establish and operate the business you created.

The 10 key questions to ask yourselfbefore you go into franchising

1. Do you work well with others?

One of the greatest skills you will need to succeed in franchising is the ability to work effectively with other people.

2. Can you accept and manage risk?

To franchise, you invest time and money in an endeavour which has an element of risk. You must be able to understand the nature of the risk and to manage it.

3. Are you single minded?

The ability to stay the course and commit to the long term is a big advantage in franchising, which is a long and involved process. The determined and focused franchisor is often the successful one.

4. Do you have a strong ego?

You must believe in your dream and have a confident personality in order to build enthusiasm and interest in others.  Franchising is a high profile undertaking.

5. Are you a good salesman?

Salesmanship is critical to franchise success.

Growth depends on finding suitable prospects and then selling them on the benefits of your business.

6. Are you a good communicator?

So much of franchising involves communication that a system that does not facilitate the free exchange of information is doomed to failure.

7. Are you an entrepreneur?

An entrepreneur sees potential where others see problems, and opportunity where others see only obstacles.  The entrepreneur identifies real needs in the market and commits the necessary effort to fill these openings.

8. Are you hard working?

Getting a franchise off the ground is a significant undertaking.

It takes time and effort, which translates into work.

9. Are you adaptable?

The ability to adapt to constantly changing circumstances is a necessity in a multi-faceted industry such as franchising.

10. Can you afford it?

You need to be in franchising for the long haul.So prepare for it. Franchising is not easy, and it’s not cheap. Building your new business takes time and patience.

How to FranchiseYour Business

SpeakerTony Fitzpatrick

 Managing Partner

ww.franchiseyourbusiness.ie