Unfortunately starting and running a franchise is not a guaranty to untold wealth and riches and there are not guaranties of success.
Now, a guarantied success formula would be great, but there is no such thing. But when you look at why businesses fail – certain patterns begin to emerge. Businesses that are aware of theses common pitfalls and failures can structure themselves to eliminate any issues that may cause failure, and therefore raise the probability of successes.
A strong and recognisable brand.
Many people in the UK would easily be able to name many recognisable brands used in this country. This is a large and communication savvy community where reputations and brands are quickly made and destroyed.
If you are looking to start a franchise or to purchase a franchise you need to be able to point to other large brands in similar markets and see if your brand has the same potential to succeed and what their recipe for success is.
A proven track record
You can judge a business by its track record. Any franchise that wants you to become a franchisee, or and franchisor looking to sell a franchise will be happy to for you to look at their financial records and talked to other franchisees. Showing people your records is proof of your operation and demonstrates how it has been established.
In many cases it’s preferable to align yourself with an industry that has been in existence for some period of time. This obviously reduces the risk however the downside is that you could be entering potentially crowded market place where competition will be intense. In this instance you will need to differentiate yourself in the market and have a unique market niche.
Franchise success relies on replicating the system rather than the product or service
Franchising is all about replicating a successful system – from producing the product to selling and branding it. It’s not about the product. The brand includes the look and feel of your business in terms of what your customers see and feel from their perspective. Part of the franchise documentation should include a Brand Manual that clearly defines the brand and how it is used (and not to be used)
Part of the definition of a system is that it is people independent.
In other words, it doesn’t rely on the skill or knowledge of the person operating the system for it to be successful. The operations of your franchise need to be failsafe and foolproof, and not dependant on a unique or specific skill or on the personality or reputation of the owner.
There are many instances of brands which have started by being built around the personality of the owner which have survived without them. If the franchise or brand is structured on good principles and the process or a technique that can be replicated, the business can still function under that name as a brand. Brands like Coco Chanel or Versace are a good example where their image is strong enough to sustain the brand for as long as the product remains constant. Bear in mind also that a brand can always change (think Nike) because it is continually upgraded to appeal to new markets or new products can be introduced (think Coca Cola) to satisfy a new market.
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