Uncovering the best support structure for your franchise network

Inside Franchise Business: a good support structure for franchisees starts when you franchise your businessThe best support structure for your franchise network is actually laid before you even start franchising.

Quite simply it is founded on the considerable work you will need to do to create a compelling value proposition for both consumers and future franchisees. This includes the following seven steps:

Step 1

Documenting your systems and processes into an operations and training manual for franchisees to follow.

Step 2

Taking your current financial performance data to model the franchisee prototype making certain there is sufficient margin for franchisees to pay a royalty that compensates you, the franchisor for the cost of managing them. Then working out what your head office costs will be from locating, recruiting, on-boarding and training franchisees to what your marketing, HR, financial and operational costs will be now and as your network grows.

Step 3

Ensuring you have registered your trade mark with IP Australia in the specific classes for your business not only to protect your brand but to grant your franchisees the right to access your intellectual property.

Step 4

Having a specialist franchise lawyer draft the franchises agreement, disclosure documents and other requisite legal documentation that will spell out clearly the rights and obligations of both parties under the agreement. This should include meeting external statutory requirements such as workplace awards, the Fair Work Act 2009 and Workplace Health and Safety laws and any regulatory requirements specific to your industry.

Step 5

Preparing the brand guidelines and marketing collateral that will allow your head office to promote your business across multiple marketing media and for your franchisees to participate in local area marketing with the same brand consistency.

Step 6

Devising and integrating business systems that ensure you have operational efficiency, compliance and visibility across your network providing point of sale, accounts management, rostering and payroll, customer data base, supply chain and inventory management.

Step 7

Establishing your business to ensure you have the appropriate corporate set-up to protect your IP, manage risk, structure tax and distribute profit now and in the future, and provide the necessary vehicles to grow your business and ultimately exit with the optimal enterprise value.

A successful franchise network is dependent on the delivery of promises – for the franchisee that’s commitment to the brand and compliance to the systems. For the franchisor, it’s providing the best means to effectively recruit, train and support franchisees as both parties mutually grow the brand.