Franchising is one of the most successful and powerful way to grow any business. It not only leverages the brand but also ensures profits while, simultaneously, satisfying consumers. However, there is a way to do it right and get the most out of it. One s
Franchising is one of the most successful and powerful way to grow any business. It not only leverages the brand but also ensures profits while, simultaneously, satisfying consumers. However, there is a way to do it right and get the most out of it. One such way is by using the 9 `I`s module.
Integration, not disintegration
A franchisor must be very careful in choosing the right franchisee. One must look at the profile, the background, the intention, because franchising is an activity which requires integration between the objective and practices of the franchisor and the franchisee. If this does not happen there could be disintegration.
A franchisor cannot succeed without a successful franchisees, so the franchisor`s interest should corroborate with that of the franchisee to a great extent.
The franchisor must understand that the mutual benefit of his franchise chain is the key to long term success and continued profits. Supposing you are a food franchisor, it is important that the freshness, recipes, hygiene, understanding of consumer taste, delivery, ambience, and the entire trail of service has to be such that the consumer benefits and relishes the experience, while at the same time the franchisor guides the progress and the franchisee at local level delivers world class quality service. This is a sure way to taste success and gain through integration.
Systems help in integration and ability and to increase profits. Systems could be operating system, delivery system, or even communication system.
If you do not integrate, your franchise chain would disintegrate.
Initial franchise fee, not free
You should never give a franchisee a location or a site or an area of operation without the initial franchisee fee, which is the price of admission into your franchise chain.
There are a lot of people who think that by giving the initial franchise free, they will get an easy entry in the market place. This is not true. The only person who will get an easy entry will be the prospective franchisee who will not value the franchise received and would take the entire exercise very casually.
It is better to take a little more time in appointing franchisees but definitely with the initial franchise fee, and not free.
In fact, the policy should be uniform, well documented and transparent. This will bring about a sense of fairness on both sides, whether it is the initial fee or the terms and conditions about royalty, all this should be explicitly documented and communicated without ambiguity. This would help prepare the franchisee mentally and financially, and the party would enter the contract with eyes open and firm decision.
This is a sure way of respecting the relationship as also investing money towards profit.
Importance of your brand
My third `I` suggests, nurture, develop and grow and protect the brand. Your brand is the most valuable asset of the franchising system. Consumers visit, experience and buy products and services because they trust the brand which is being offered through the franchising system. This `I` of Importance of brand is very critical and full care should be taken that all franchisees follow the upbringing and building up of the brand and not downfall of the brand.
A brand is built in the minds and hearts of the consumers, and its foundation should remain engraved in the minds of the customers steadfast. For example: if you are in the education franchising business it is important that the faculty, the curriculum, the facilities, the study material and all related elements of the brand are delivered to the students meticulously, who visit your franchisees.
Interesting & enjoyable
My fourth `I` suggests that the business that you are in should be interesting and should be enjoyable to you. Similarly, if you are appointing franchisees, they too should be interested in the business, and would derive a feel of joy by participating in it. For example, in the hotel business or in the entertainment business your profits and sales will grow only if your franchisees find the business interesting and enjoyable. Therefore, choosing, maintaining and retaining the right franchisees in your chain is the key to being profitable. You need to groom and nurture the interests of the franchisee by introducing newer products and rendering regular support, so that he does not find the business dull, drab and monotonous..
Infrastructure & structure
To have a robust franchise chain it is important to select suitable locations and sites where your franchisees would execute business. Similarly, the ambience, the interiors and the signage should be maintained to a standard specification. The franchisor should help develop the infrastructure of franchisees, and provide technical and professional advices from time to time in a quest to promote sale.
Inclined, not declined
You must make sure that the franchisee is fully inclined towards your brand and your business with 100 per cent passion. This must be taken care of, whether in case of a new or of a renewing franchisee. If the franchisee is not continuously inclined towards you, you would notice that his business has declined. Do not force any franchisee to be part of your chain because of the greed of just money. The franchisee should be truly passionate about your brand and his work.
It is very important that your franchisee is well motivated and involved and also involves some of his family members, whether his spouse, parents, son, daughter, or brother, so that his stake in the franchise business is not only up to the monetary level but also at family and emotional level, so that the franchisee in the chain can grow over generations.
Just like brands can go on forever, so can the franchise chain, provided that the franchisee finds it profitable not alone in terms of monetary gains but also in terms of family bondage and long-term business involvement across generations, alongside his emotional tie-up with the franchisor.
It is also important to get franchisee`s involvement through regular training and upgradation of skills.
My eighth `I` is Investment on financial basis, whether it is a product or a service, whether it is a garment franchise or a car rental franchise. It is important that there is adequate investment financially so that there is never a stock-out situation and no consumer goes back empty handed. Right from the start up to the continuity of business, regular and growing financial investment will help increase profits and gains through the franchise chain. Good software and financial systems should help franchisees get good returns on their investments.
My ninth `I` which I consider the most important is `Integrity`. Any franchise business is based on honesty. There should be a direct relationship between the franchisor and the franchisee and not through brokers and dalals. Whatever is promised to the consumer should be delivered in ditto, and there should not be any discrepancy or breach of contract, whatsoever. Integrity in communication, delivery and quality and honest practices will attract more consumers towards you and your franchisee chain and increase sales, repeats and profits.