What does a good franchise package look like?

October 12, 2018

 

I hope my blog finds you well.

 

I have been asked by What Franchise magazine to write an article for their next publication. The article is about "What does a good franchise package look like?". Well, you now have the world wide first viewing rights to my article! I hope you enjoy the read....

 

 

 

What does a good franchise package look like?

 

When you invest in a franchise, you have every expectation and right to know what your money is paying for. A big part of the answer lies in the initial ‘franchise package’ – the range of materials, activities, training and support you can expect before, when and after you become a franchisee.

The first thing to note is that packages do vary, depending on the type of franchise and business. There is no “one size fits all” and franchisors develop an initial package based on experience, cost and fundamental necessities.

 

A good franchisor will present a combination of many different facets which should give the franchisee the best possible start to their new venture. The objective is to keep that “honeymoon period” going as long as possible!

 

However, as a potential franchisee you also need to look beyond the initial phase and ensure that this is the right opportunity for you; that the business model stacks up well, especially after those first few months of high activity.

 

The start-up package should be discussed in great detail prior to signing the franchise agreement, to ensure clarity, to adopt an action plan and to give the franchisee confidence about how to roll out their business. Here are some of the areas you should be exploring.

 

Training

The franchisor should outline a comprehensive training programme, with details of each subject covered. This will typically follow the contents of the Operations Manual and will put the ‘flesh on the bones’ of running the business successfully. The location and dates of training will also be agreed.

Although the franchisee typically bears their own costs such as accommodation and travel, the training programme is a large investment for the franchisor; much time and resources are spent in developing a great process for the franchisee to enjoy and benefit from.

 

Pre-launch marketing campaign

Most franchisors will plan a pre-launch marketing campaign so that the franchisee can hit the ground running; the aim being to have customer activity and hopefully some revenue on day one. This may include local PR, leaflet campaigns, adverts in local press, website pages, Google AdWords, radio promotions... there are a lot of different channels and the franchisor should know what works best based on experience.

 

At My Window Cleaner, we plan a month of pre-launch activity prior to each franchisee’s business launch: two weeks of marketing activity, followed by a training week and then a “gap week”, before trading commences on week five. Over that full four-week period, we manage the marketing for the franchisee while they are getting used to their new business.

With most franchises, the pre-launch marketing budget will be taken from the initial franchisee fee you invest.

 

Franchise Territory

The franchisor should have created viable franchise territories, typically by engaging an experienced franchise mapping company to define them, based on existing customer demographics and the marketplace.

 

The territory should be known by the franchisee and discussed between both parties in great detail. These discussions will lead onto how the pre-launch marketing campaign is manifested, as well as a planned expansion after the initial launch.

 

The franchisor should provide several maps (high-level detail with hot-spot mapping, and low-level detail with territory boundaries), as well as the full demographic profile of the potential customer base. These will be available, but not usually given to the franchisee until training starts.

 

In-territory support on launch day

I believe it is imperative that the franchisor is physically present for the first few days of a new franchisee trading. This ‘handholding’ exercise will allow for opportunities to be maximised and errors to be eradicated. It’s also another great way to build trust and share experience between the franchise partners.

 

Supplier links & relationships

Most franchisors use third-party suppliers, whether for vehicles, printing, essential products or services etc. As part of the start-up package, a new franchisee should receive a warm welcome from these suppliers, along with great customer service and perhaps some pre-negotiated discounts.

 

Business model/plan

It may seem obvious, but a well-presented working business plan is key at the start. The business model will have been developed over time by the franchisor and the franchisee will bespoke it to their own territory and circumstances. A business plan may also be necessary to present to banks or other financial institutions for initial funding.

 

It’s important that the franchisee takes ownership of the business plan from day one and keeps it updated at all times. The model should also take into account cash flow requirements and working capital.

 

Marketing strategy

The ongoing marketing plan is at the heart of your success. It will include many different materials, techniques and channels, which the franchisor has tried and tested over the years.

Franchisees need to be able to read, understand and then apply the strategy to their own territory. A planned approach from day one is essential for business growth.

 

Stationery & branded materials

At My Window Cleaner we ensure that when a franchisee walks into the training room on day one, all their personal stationery, territory wall maps, marketing materials and uniforms are waiting for them on the desk. It creates a great impression! A franchisee will know exactly what they are receiving prior to starting training, but seeing it for the first time brings home the reality of starting their own business.

 

Follow-up meetings

As part of the start-up package, you will want to know that this is just the start of the relationship, not the end! A franchisor will pre-plan follow-up meetings, to ensure that the franchisee is on track, the business plan is being achieved and to help iron out any operational issues. This mentoring process is discussed at an early stage and normally diarised during the training week.

 

Operations Manual

The Operations Manual forms part of the package and is a key and fundamental part of the franchisee’s business, the blueprint on how to run it successfully. A franchisor may let a franchisee see the manual as part of their due diligence, but the manual will not be officially handed over until the training week commences.

 

An Operations Manual may be presented in different formats; some are physical documents and some are online. At My Window Cleaner we appreciate that people learn in different ways and therefore our manual is in written, video and audio formats.

 

Lastly, I always “grant” a franchise, never “sell” a franchise. A franchisor should choose their partners carefully and ensure that there is a natural long-term fit for both parties. So, although an initial franchise package may be a potential “sales tool”, it’s the viability of the business and the relationship that needs to stand the test of time, not just the initial package.

 

Choose your partners carefully and not just on the package presented to you. A long term flourishing business relationship is more important than a few extra thousand leaflets!

 

Kind regards,

 

Ian

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