Tips to Consider Before You Franchise Your Business

Franchise TipsBy Sean Hegarty, MSI Taylor, Accountants, Brisbane

Australia is the most franchised nation (per head of population) in the world and franchising your business can be a very successful way of expanding. However it’s important to correctly develop and test business concepts before considering a full franchise system.

Why Franchise Your Business?

The reasons why people are interested in setting up a franchise include:

  • Network growth of an already established business using the franchisees manpower and finances
  • Not having to worry about each locations operations on a day to day basis. The franchisee is a motivated business owner wanting to ensure the best outcome for their franchise
  • Franchisor can earn a clip of the sales through the expanding franchise network
  • Ability to service customers nationally where required
  • Franchisor requires less capital to expand the business

As a franchisor you are required to comply with legal requirements in establishing the system and ensure that all controls, systems, processes and procedures are in place to enable a franchisee to be as successful as possible. Further your business should be able to demonstrate that it is successful and profitable as the “template” for all other franchisees.

The Franchise System

A franchise system cannot be setup overnight – typically from the initial concept to offering the franchise system to the market can take up to 3 years. The following factors need to be considered during the process:

  • Business branding must be put in place
  • Franchise Agreement to be documented by Solicitor
  • Write an operations manual
  • Develop training systems
  • Develop marketing and advertising for the business
  • Continually apply best practice to the operations of the business
  • Ensure you have enough capital to fund these upfront costs

It is important to consider that networking is an integral part of owning a franchise. Simply put, you can’t expect to be successful without a network of advocates and referrers. A great reference website regarding the benefits of building a network can be found at Relevant Networking Events which educates people about the right way to predicably build a network through networking events.

Overall, franchising is a very rewarding experience both personally and financially. As experts in the field of franchising, both at the level of head franchisor and franchisee, MSI Global Alliance has experience in dealing with both sides of the Franchise equation, giving us unique insights into the operations and conduct of the franchise system.

Contact the author directly by email or by telephone.

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