Why 2009 is a great time to franchise your business

Franchising is a great business model to rapidly expand your business by leveraging other people’s time and money. What is more, the current economic downturn provides a particularly fertile ground for it.

If you find the thought of expansion at the current time laughable, then read no further – this article is not for you. If, however, you like the idea of using the current situation to your advantage to grow when everyone else is running scared, then read on.

First, let’s be clear what we mean by franchising. A franchisor develops a brand and business system that works well and profitably. He then grants rights to a franchisee to use these elements to build a successful business in their own right. The franchisee pays for these rights, as well as ongoing support from the franchisor.

They are buying into a proven business model – and paying modestly for the right. Whereas 85% of new businesses fail within the first year, 85% of franchisees succeed. Why learn the hard way?

Per capita of population, the UK still remains relatively under franchised – in places like Australia and the US, the situation is very different. In these cash-poor times, this represents a huge opportunity for UK businesses to expand using other people’s investment.

Couple this with the fact that redundancies are creating a pool of talented, experienced individuals looking for a new opportunity - often with a severance payment in hand - and you have a pretty potent combination. What better place to invest than a new business venture with a proven track record?

So, the opportunity is there, but where to begin? Well, fundamentally, for a franchise to succeed, it is critical that everyone can make money. Sounds obvious, doesn’t it? However, most of the horror stories we hear about franchises are down to poor financial models – and unscrupulous franchisors in some cases.

Once you are satisfied with the financial model, the next element to put in place is systems that are easy to understand and to operate. These need to be documented and training developed to enable new franchisees and their employees to operate them effectively.

With the franchise package in place, then the selling begins! Understand that your business is now your product, not the product or service that it sells – you are selling a business opportunity. Make sure you have a comprehensive marketing programme in place, including a good website that both communicates the opportunity and is able to field queries.

Do not underestimate the importance of your first franchisees – they will provide a point of reference for years to come. Be personally involved in ensuring that are absolutely the best fit for your business.

Finally, with all these elements in place, be prepared for your business to snowball. Your first franchisees are now demonstrating how big an opportunity you are offering – it is now your duty to ensure that as many franchisees benefit from it as possible!

Could you successfully franchise your business? Click here today for a free, no obligation Franchise Planning Session.