How a franchisor helps you to prosper

A major draw of investing in a franchise is the support you receive from a franchisor. Here’s what you should get for your money

In the UK, 93 per cent of franchisees claimed profitability in 2018, according to the latest British Franchise Association NatWest industry survey.

When comparing that with the success rates of independent businesses - 80 per cent of the UK’s independently owned small and medium-sized enterprises fail within their first year - it’s not hard to work out why budding entrepreneurs are opting to invest in a franchise.

For many people, the thought of launching an independent enterprise has certainly crossed their mind. But for those with a lack of experience in running a business - and the host of critical responsibilities that come with the role of business owner - attempting to go it alone can be particularly daunting.

This is where franchising comes in. As well as the backing of a credible brand name, franchisors insulate franchisees’ businesses by offering essential support resources on a relatively unlimited basis.

In the majority of cases, if a franchisee needs guidance a franchisor will reach out a helping hand or at least put the franchisee in touch with someone who can help.

But what support should you expect from a franchisor? When researching potential investments, ask a franchisor for an overview of the assistance you can expect to receive, as this will help you make an informed decision about your investment right from the get go.

You should see the following processes and support programmes outlined:

Pre-launch

Territory mapping and site/ location selection

As part of their commitment to your investment, most franchisors will allocate you an exclusive territory to protect the customer base you will go on to create and grow.

If you decide to invest in an existing franchise where a franchisee is vacating, the parameters of that territory should already be established and you’ll have the chance to maximise the return from a good client base.

For new locations or territories, brands often work with a territory mapping expert to determine the most profitable and marketable area for your business. But bear in mind that this isn’t necessarily the case across the board - some franchise brands don’t warrant the need for exclusive territories at all.

Legal support with obtaining premises

Once the perfect site has been found, many brands will support you in securing rental agreements or finalising sale procedures. Securing the various insurances and making sure the necessary and often complex paperwork has been signed and filed is a long-winded process, so advice from a legal expert is worth its weight in gold.

Comprehensive training

This might go without saying, but a quality franchisor wouldn’t dream of sending you on your merry way without first exposing you to a full programme of franchise training.

Whether in person or delivered digitally, this period of training is crucial to your success. It would usually cover everything from business operations, finance and IT to marketing and PR activity - and much more in between.

At Stagecoach, our franchisees spend a week with us at our head office in Woking, where the various specialists within our support team deliver interactive sessions linked with their respective disciplines.

Support with digital tools

For the less digitally capable, support with online marketing and operational software is key.

For instance, many franchisors will set up a territory-specific website and social media pages on a franchisee’s behalf prior to launch. Once operational, it’s often the franchisee’s responsibility to maintain the content on the pages, but additional support is usually available if social media isn’t necessarily your thing.

Ways for the whole franchise network to communicate

Before you sign your franchise agreement, I would recommend reaching out to existing franchisees to ask questions about their experiences.

Once you’ve joined the network, reach out again and build yourself a community of like-minded peers to sound out ideas and share best practice. Make sure your franchisor promotes this community feel within its network. It’s even better if it provides tools to make communication happen between you easily.

Launch

Brand representative at the launch event

Once you’re ready for grand opening day, it’s not uncommon for your franchisor to send a representative from the brand to support you during the event.

Whether they’re there merely as a friendly face and an extra pair of hands or in a more professional capacity, it can be extremely reassuring to know you’re not on your own.

Assistance with a marketing and PR campaign

Simply put, there should be a whole host of brand profile-raising marketing materials at your disposal before, during and long after the launch of your business.

Whether in physical or digital form, these resources exist so you can get on with the job of establishing your new business.

Some franchisors may guarantee you initial business leads, while others may have a defined set of activities you must ensure are completed.

Ongoing

Social media, marketing and PR

If you’ve never owned a business before, marketing and PR may not come naturally.

Customers aren’t just going to fall into your lap, so you’ll need to make a proactive effort to establish your brand in your territory. This can be achieved by implementing a strategy of consistent and quality social media, marketing and PR activity.

Your franchisor will have likely employed someone, or a team of people, to help you manage this in-house or it might work with a specialist agency.

However, the brand manages its profile-raising activity, make sure you take full advantage of the available resources.

Regular refresher training

Training doesn’t stop the second you walk out of the head office at the end of your initial training programme.

Franchisors should offer a lifetime of unlimited training, whether you attend sessions in person or keep yourself educated through digital refresher training.

Innovation and measures to retain market leading status

What made you research and shortlist a particular franchise in the first place? Was it the brand name that appealed to you?

If you’re inclined to invest in a franchise because of its market-leading status, you would expect the franchisor to maintain this standing once you’ve joined the network.

This should include profile-raising activity like national marketing campaigns and exclusive partnerships, all at the cost and responsibility of the franchisor.

Legal advice

For brands like Stagecoach, legal formalities like child safeguarding and DBS certifications are significant components of our standard operations.

We’re well-rehearsed in securing the required accreditation to safely operate a children’s services franchise, which is why our franchisees rely on our support to obtain the necessary training and certification.

Attempting that process without the guidance of an expert can be complicated, drawn-out and frustrating, so I would advise opting for a franchise that has someone dedicated to compliance of these important facets of the business.

Other components of the ongoing support strategy should also include finance and business growth advice; communication and networking opportunities; and, where relevant, franchisee handbook and/or physical support documentation.

Succession planning

Ongoing support should be available throughout the lifecycle of your franchise, including the time at which you choose to retire or move on.

A good franchisor will ask you what your ultimate aim is from becoming a franchisee before you invest. Common motivations are a better work-life balance, taking control of your career and the potential to build a business to pass on to your children or to retire earlier than a job would have allowed. At Stagecoach, we have open discussions with our franchisees about their options should they choose to move on to pastures new.

More often than not, our franchisees have already found someone to take over the business from them - many of our franchisees are former Stagecoach teachers who have taken on an existing territory from the previous principal - so we support them both with this transition.

Alternatively, in cases where the franchisee hasn’t found a suitable replacement, we have a tried and tested marketing process for finding someone suitable to step into your shoes.

Think of this as your franchisee support checklist. Add your own questions and take it with you to discovery days or keep it handy for initial calls. Don’t feel bad about grilling a franchisor - we expect it.

THE AUTHOR

Andy Knights is chief operating officer of Stagecoach Performing Arts.