Advisory Dec, 11 2009

Building blocks of franchise program

Franchising is a remarkable way to develop and expand businesses. If you are willing to expand through franchising, consider some of the major building blocks of franchise program discussed below

By Ramanjit Kaur
Feature Writer
Building blocks of franchise program

Franchising undoubtedly is a remarkable way to expand an existent business. A great deal of effort goes into building a strong franchise system. As Donald Boroian, Chairman and CEO, Francorp, US says, “Franchising a business is like giving birth to babies that need complete care to grow.” It is another way to expand and multiply the business within a short span of time. This article discusses the building blocks of franchise programs that are required to construct the strong foundation of a franchising business.

There are several key elements that a franchisor has to consider prior taking the franchise route to expand the business. These are:

  • A pilot operation/ prototype stores: Before heading forward, it is important to understand whether the business franchise is going to be successful or not in the chosen area or location.  To get further knowledge of that particular area franchisors must hire a consultancy firm or can open a prototype store to study the prospects of their products.
  • Recruitment of illegible franchisees:  A potential franchisee ensures the fate of franchise expansion. Therefore, a franchisor has to be cautious while recruiting the right franchisees.  Besides this, to increase the success rate of the franchise business, a franchisor has to look at the aspirant’s financial strength; personal attributes and business experience.
  • Training module: A franchisor must offer pre-training sessions to the franchisees to make them aware of business functions. Besides the initial training, the curriculum for ongoing training must be a part of the franchise agreement.
  • Managing franchise relationship: To encourage the chances of long term relation, a franchisor has to manage healthy relationship with its franchisees. Three specific elements to maintain and retain franchisees within the franchise network:
  1. Support and compliance: The two most important words to consider while franchising. A franchisor has to support his/her franchisees and ensure compliance throughout the network to expand.
  2. Obligations to fulfil: Being a franchisor, you must ensure strict and timely vigilance of the outlets by your staffs.
  3. Acknowledgement: Acknowledging your franchisee on a timely basis is sure to gain good performance of the franchisees. The best way to make the franchisees feel that you care for them is to organise workshops, seminars, annual award functions, and franchise meets.
  • Field staff: Field staff helps franchisee with insightful ideas and suggestions to improve. As per Arun Khetan, CEO and MD, NAKS says, “Field staff are the backbone of any franchise system provided the system has inbuilt mechanism to optimise the organisation goal by effectively utilising the potentials.”
  • Upgradation of services: It is another important building block of franchise program, which involves upgradation of services, introduction of advanced technologies and research and development of new products into the system.  
  • Brand promotion: It is necessary for the franchisor to promote his/her brand nationally in order to ensure the success of the franchise system.

To conclude, we have provided you with some major points that go into building a strong franchise program. Keeping these points in mind an aspirant can handle and expand its business efficiently.

Related: Terminating the franchise agreement

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