When it comes to franchising your business, putting together a solid business model is only the first step of the journey. A franchise is only as good as its Franchisee, so you’ll want to think long and hard about who you entrust your next franchise to. After all, they will be responsible for upholding your reputation, so the last thing you want is to take on a franchisee who’s just not up to standard. It’s not enough to just take on anyone who approaches you- according to the latest estimates, there are approximately ten serious enquiries for each appointment for new franchisors (and that’s after you have whittled out the tyre kickers). With established franchisors, that number increases to around 50:1- so you’ve got a pretty big job on your hands to choose the right franchisees to take on.

First things first, you’ll want to actually reach out to those potential franchisees in the first place. Fortunately, there are plenty of options open to you. You can build up a huge number of applicants to then whittle down. There are numerous trade magazines and websites which list franchising opportunities. The advantage of these is that they will only attract applicants with an existing interest in franchising, which will save you a lot of time trying to explain what franchising is.

Once you’ve got a decent number of applicants, it’s then time to decide on exactly who you are going to entrust with your next franchise. How do you do that? Before you start it’s a good idea to build a profile of the kind of person you are looking for. The trick then is to set up a solid recruitment process which will weed out all the applicants who aren’t suited to the job at hand. That way, you’ll be left with the cream of the crop, who can then help you get your franchise off the ground and make it a successful business.

There are several key factors you’ll want to look for. Firstly, they need to have a strong work ethic and commitment to making their new franchise succeed. Ideally, they should have some experience or understanding of your sector, so that if needs be, they can take on some of the day-to-day operations. Management experience is important, but so too is more practical experience, so they have a full understanding of how the franchise will operate. Finally, ensure that they fully understand your franchising business model, so that they will be able to take what’s written on paper and turn it into a living, breathing success story.

Of course, recruitment is easier said than done, and the whole process can be rather demanding and time-consuming. Luckily, though, there are people out there who will be able to help you. The Franchise Professionals have their very own recruitment team, primed to help you find the perfect franchisees for your business. After trawling through countless applicants, they will cut out all of the prospective buyers who simply aren’t suited to your business, and help you select the ideal candidate to entrust with your next franchise. That way, you can be sure that they will help uphold your strong reputation both with customers and within your industry- and bring in a healthy stream of revenue, too!

Budgeting for Business: Why You Need it for Your Franchise Business Plan

It’s not just the start-up costs that franchisees need to work out when they look at a franchise opportunity. There is a wide range of budgeting concerns that need to be considered and which you should be putting all these into your future business plan.

The first couple of years while the franchise begins to bed in are obviously critical to success. Making sure you have enough money to survive this period and stay on track, not only with the business but also in your personal life, is vital. Of course, you need to be realistic about how much money you are going to require and whether you can handle it reasonably comfortably:

The Franchise Fee

The franchise fee is going to be one of your biggest initial investments. This is the amount you pay to use the brand and get the training you need. The amount will vary depending on the type of franchise you are taking on and how much you can or are willing to pay will determine who you are going to choose. Some franchises do offer different incentives and payment arrangements which may help you to spread the cost in the short term.

Service Fees

Added onto the initial franchise fee, you will also have to pay a service fee on a weekly or monthly basis. This will again vary from franchise to franchise but could be as much as 20% of your sales. The average in the UK is around 8%. Most franchisors prefer to base any service fee on sales rather than profits simply because it’s easier to monitor.

Working Capital

You’ll also need some of your own working capital that will give you the leeway to build your customer base and cover any expenses that may arise out of the franchise arrangement. This can often be difficult to judge and you need to be realistic about what you are going to achieve and how quickly you are going to get there. It might include marketing and advertising as well as employing staff to help you move forward. Getting advice from a franchise specialist who knows your sector can be a useful way to gauge this kind of expense.

Capital Investment

Are you going to have to invest in infrastructure and services relating to your franchise? This also varies a good deal between different franchises and it’s important to be clear about what is going to be your responsibility. A retail franchise may well have a bigger need for capital investment than a home office one where you have most of the infrastructure in place already. You also need to think about the finances you require to support yourself during the start-up phase. This includes covering your household budget so that you aren’t struggling to make ends meet once you’ve covered the financial responsibilities for the franchise. Learning basic budgeting skills and being realistic about what you can afford and how long it will take you to get the business off the ground are all important.
One of the main reasons any business fails is because it hasn’t got the solid financial infrastructure in place to get over that initial stage of growth and development. This means you need to take a very close look at the budgeting side of things and how it fits into your overall business plan before you settle on a particular franchise.