There is a reason that franchising as a business model has spread to virtually every corner of the globe, and why you can find franchised businesses offering almost any concept, product or service you can think of. There is an enduring appeal that the model provides, and more importantly that it provides to both the franchisor and franchisee.
If you are an owner of an existing brand with a great product, a recognised name, and a replicable concept, it’s an unrivalled opportunity to grow your business more rapidly and widely than you would be able to do with units you were setting up alone. Of course there are challenges and obstacles to overcome, but a great franchise network with passionate, experienced and driven franchise owners will drive exponential growth.
So why is franchising good for your business?
Franchising at its best, thrives on balance and collaboration. A franchisee is nothing without the concept, brand, system and support provided by their franchisor… but the franchisor is nothing without their network of talented, creative and driven franchisees. It is they who truly understand the business at its purest and what the customers really want.
When the relationship feels fair, equitable and balanced the long term chances of success are that much stronger. A franchised business works only when the franchisor understands the economics of their unit franchises, and has set up the model in such a way that those unit franchisees are likely to be crucially both happy and financially successful.
For someone looking to take on a franchise, the options and complexity can be daunting. Fundamentally though, you should be looking for a concept that provides the following…
1. Head start
For many people considering a franchised business, this part is the most important. We all know that inherent within the model, when you start up you are going to have to pay an upfront fee that wouldn’t be there were you to go it alone. So there has to be really significant value in this fee.
When joining a franchise network, you are benefiting from the expertise and experience of those that have walked the path before you. Both the franchisor themselves, and every other franchisee that has set up and helped refine the model for people like you.
One of the most daunting aspects of starting any new venture is the “how”. You may have a great idea or concept, but knowing how to turn that idea into a business takes a very different skill set. When taking a franchise, those lessons have already been learnt, research conducted and mistakes rectified.
A good Franchisor should provide you with a proven system, initial training on the model and how to operate it, and a brand that should resonate in your market. It’s your job as franchisee to leverage all of that locally.
2. Enhanced credibility
Almost every startup business suffers initially from limited name recognition, and a degree of uncertainty for your customers whether you are the real deal or not. That can be hard to overcome, and so the ability to counter that is a major factor in the success of franchising.
When you take a franchise that is well established, it is likely that it will already be a recognised and trusted name. You immediately benefit from what that brings, and will usually grow your sales far faster on the back of that trust that you would ever be able to do solo.
When thinking globally, if taking a franchise brand into a new country, the benefits that the brand recognition provides are likely somewhat lessened, given that it may have little or no local awareness initially. That is not to say that it is still not a significant asset… customers will place great value in a brand that has established success in foreign markets. Particularly if the country of origin is known to be a world leader in that product or service. Hamburgers from the USA, or Early Years education from Finland for instance.
FinlandWay®’s market entries in Morocco, Colombia, India, Vietnam, Peru and Brazil all gained wide media attention and interest – read more here.
In those cases the global prestige with which that nation is held in the industry will more than compensate for the lesser known brand name itself. With that comes an extraordinary opportunity to take advantage of that reputation bum – in a new market that is ripe to grow with little to no direct competition.
Education in particular is a sector to which this holds true. Many of the fastest growing economies in the World are in developing nations with young and rapidly expanding populations. The thirst for education there, and the willingness to pay for quality, is exceptionally high. Many local education institutions will look overseas for foreign brands to provide them with a quality name, pedagogy and certification that elevates them beyond their local competition.
Early education brands from the UK, US, Canada and Australia have held sway in education for many years in this area, but awareness of the specialism of systems like the Finnish early years programmes have accelerated the demand for more niche offerings. Taking something new to market allows you to stand out from a crowded marketplace where everyone else is touting the same credentials, that have long lost the potency that they once held.
3. Better Chance of Success
There is a well used statistic that upwards of 60% of small businesses fail within the first 3 years, with a comparatively tiny number of those being franchised. The honest truth is not as clear cut as that, and unfortunately sometimes franchises don’t work out… be under no illusions, a franchise business is at as much risk of failure as any other venture if you as business owner don’t put in the hard work and commitment that is needed.
That being said, if you take a model that is proven to work, has a great brand and product… and crucially follow the model without feeling the need to reinvent the wheel your chances of success are significantly improved.
4. First class training and support programme
Rolling out another old adage… in franchising, you are working for yourself, but not by yourself. Yes it’s cliched, but it actually really holds true and is one of the reasons you should seriously consider the model.
When you run a new business it can be a challenge to face things alone… you learn by doing and often the doing is by making mistakes. Those lessons are valuable, but sometimes can be financially or professionally very painful.
Before you even start your business, your franchisor should be providing you with an outstanding onboarding programme. That should incorporate both theoretical training on the industry, real hands-on lessons on sales, marketing, operations, IT and a suite of administrative skills such as bookkeeping and HR that you would never get alone.
On an ongoing basis, you will then have a franchise support team dedicated to helping you to succeed. They are there to be your voice, your sounding board and often to drive and push you to make your business stronger.
Our advice is to build a great relationship with your franchisor, and to take advantage of every drop of information and support that they make available to you.
To learn about FinlandWay®’s extensive system onboarding and ongoing business & pedagogical support, contact our expert team today!
4. A peer group
You will often hear a franchised business described as a network. This word is incredibly apt, and the support and sharing of ideas from franchisee to franchisee is extraordinarily powerful. There is a camaraderie that develops in a network, and great franchisees are usually happy to share their experiences, tips and tricks with each other in the interest of growing and developing the brand.
A great franchisor will support, encourage and facilitate this with networking opportunities, conferences and advisory boards.
Ready to go for it?
Pretty compelling stuff, but no franchise is perfect. Anyone interested in joining a franchise should go into it with eyes wide open. Do your research, make sure you are passionate about the brand and the product, and trust your gut. You are going to build a long term relationship with the franchisor so make sure that you connect with the leadership and your support team. Do you share the same culture and values?
You also need to be prepared to sign a comprehensive legal agreement that is going to dictate many of the facets of how you are going to run your business. Remember however that any rules will be there for a reason.
On the balance of things, franchising over the years has had an overwhelmingly positive impact on small businesses and has allowed millions of people to set up for themselves, safe in the knowledge that they have someone who has their back supporting them.
Interested in opening a FinlandWay® School?
Are you planning to open a preschool in your location or have an exsisting unit already and looking to stand out from the competition? Get in touch with our experts today and start planning your future!