Running a franchise business requires a massive amount of effort, so it’s not to be taken lightly. You will very quickly fall at the first hurdle if you don’t understand how to make your business a success.
Thankfully, you’ve come to the right place! This post will give you the ten best tips for a successful franchise business in the UK.
1. Pick Your Ideal Franchise Opportunity
Some franchise opportunities are better for you than others.
Don’t jump at the first investment idea you see; take the time to consider what you’re looking for in a suitable franchise business. Ideally, you want an opportunity that provides the following:
- A brand that aligns with your values
- An industry you’re either interested in or have experience in
- A franchise that meets your investment budget
- A franchise that fits around your lifestyle
You can’t spend too long deliberating on this because it sets the tone for your franchise business’s success. If you pick the wrong opportunity that doesn’t suit you, then it’s almost impossible to make it successful. It’s far easier to run an incredible franchise when everything aligns and you’ve got a business you genuinely believe in.
2. Don’t Stray Too Far From The Franchisor’s Business Model
Franchising is its own business model, but every franchisor will have their own model that outlines how they want franchisees to run their business.
This might sound a bit confusing, but when you open a franchise business, the franchisor will provide a general welcome pack that outlines the core business model. It will run through some of the basic ways they want you to run this business, including key things like the operational standards and brand guidelines.
Follow these like the law!
Lots of franchisees fail because they try to reinvent the wheel and come up with a new business model. While you may tweak things here and there to suit your local market, the road to success lies in following this framework and trusting that the franchisor knows how to run a company.
3. Pay Attention To The Franchise Rules & Agreement
Following on from above, you’ll receive something known as a Franchise Agreement when you invest in a franchise business. According to Sterling Law, the Franchise Agreement is a legal document that explains the relationships between franchisors and franchisees.
Without getting into too much legal jargon, this agreement basically outlines your responsibilities when running a franchise.
It tells you what you can and can’t do, particularly relating to things like:
- Use of intellectual property
- Meeting certain performance markers
- How much assistance you get from the franchisor
There are two key things to think about if you want to run a successful franchise. Firstly, read through the agreement with a lawyer before signing anything to ensure you’re getting a good deal. It may transpire that this agreement severely reduces your royalties and gives you almost no flexibility. In which case, it’s a dud, and you should find other franchise opportunities.
Secondly, you must be aware of this agreement to avoid doing things that impact your business’s success. For instance, there could be a clause in the agreement that means you must hit specific KPIs or you lose the franchise. Paying attention to vital things like this will help you understand what to focus on and how you can avoid losing a franchise before you’ve had a chance to succeed.
4. Maintain A Strong Franchisor Relationship
You need an excellent relationship with your franchisor.
Why?
Because franchisors are effectively in control of whether or not you keep your franchisee contract; if they’re not happy with the way you run the business, they can kick you out. It’s as simple as that – and they’re more likely to have a negative view of you if you never contact them.
Always make sure you reach out to the franchisor and keep them updated with everything. Don’t be afraid to offer constructive feedback or pose new ideas that may help the parent company. They’ll appreciate this, which puts you in a good position when new contracts are rolled out.
Plus, having a strong relationship with a franchisor may also mean they come to you with new opportunities. Perhaps they’re rolling out new products or infrastructure upgrades. You get to test these before other franchisees because they trust you, which can give your business an edge.
5. Don’t Underestimate Your Funding Requirements
Many franchise businesses fail because the franchisee underestimates the funding requirements.
You need an initial franchise investment to actually earn your opportunity, but then you have to pay for the general business expenses. The trouble is, it can take time for your franchise business to make a profit, meaning you need cash reserves to cover the essentials.
Make sure you understand exactly how much money you need to run and maintain your franchise business. Seek franchise lending opportunities to gain enough working capital and avoid money problems. Also, in the beginning, look for franchise businesses that don’t have a high minimum investment.
If you can manage your franchise’s cash flow, then there’s a much greater chance of seeing success.
6. Make Use Of Franchisor Support Tools
Franchisors will rarely make you sign a Franchise Agreement and leave you in the dark. After all, your success is their success; they want your business to do well.
As such, they usually provide a range of support tools to help you be successful. This may involve:
- Training days
- Online resources
- Access to marketing tools
The list can extend – it depends on the franchise in question – but the critical thing is that you take full advantage of any support. Do all of the training, utilise the premium software solutions, etc.
Franchisors have worked with loads of franchisees before you, so they should understand all the common concerns and issues. Support packages are designed to tackle or prevent frequent mishaps – and they set you up for more long-term success.
7. Form A Business Plan Around Customer Satisfaction
As well as using the general franchise business model, you should formulate a business plan that revolves around customer service and satisfaction.
Why?
Because your franchise business will only be successful if it does two things:
- Maintains a steady flow of loyal customers
- Finds new customers to expand the customer base
Keep in mind that research shows 80% of consumers deem good customer service important to keep them loyal. In other words, if you’re providing a great service and satisfying your customers, they’ll keep coming back for more.
You establish a loyal customer base that gives you a steady flow of income. Happy customers also create opportunities for new customers – positive reviews encourage more people to visit your business, leading to new sales and even more loyal customers.
Remember, the general business plan is already laid out for you by the franchisor. This means you can put more effort into building your franchise around customer satisfaction to help it grow and be as successful as possible.
8. Invest In A Strong Local Marketing Strategy
A huge franchise business benefit is that you rely on the parent company for a lot of broad-scale marketing. For example, Starbucks pays for all of its online or digital advertising, which benefits its franchise owners.
So, you don’t have to worry about things like that.
Instead, you should invest in a local marketing strategy that captures your target demographic. Let the parent company handle the main marketing and branding campaigns while you focus on establishing a local presence.
It helps you become successful because you tap into your main audience and become known within your local area. You already gain trust through the franchise brand; local marketing draws in more customers.
9. Follow A Careful Recruitment Plan
There’s every chance your franchise business will need employees, in which case you must recruit carefully.
Pick the right employees for the brand – ensure they match the parent company’s brand ethos and culture. At the same time, you should invest in talented individuals who will help steer your franchise business forward.
Don’t recruit the first applicants you see, just to save money and establish a team. Follow a careful recruitment plan to build a squad that’s aligned with the same goals and committed to the success of this business.
10. Conduct Constant Competitor Research
Finally, always be on the lookout for what your competitors are doing.
Carry out competitor research to see who your biggest rivals are in your local market, and what you can do to set your franchise business apart from them. You’ll spot opportunities that help you fill gaps in the market or convince consumers to choose you over your rivals.
It’s business 101, but there’s an extra benefit for franchise business owners. Competitive research may help you spot new ideas that you can propose to the franchisor, getting into their good books. It goes back to the earlier point about maintaining a positive relationship and the benefits that may bring in the future!
Adhere to these ten tips for success in your franchise business. They’ll help you find the best franchise opportunities and learn how to run a company that doesn’t fall flat after a few months.