4 Essential Franchising Tips for Retail Businesses

As franchising has become a common option for successful or established businesses, many aspiring entrepreneurs and startups look forward to buying a franchise and start doing a business on their own. However, as a franchisor, you may be clueless about your franchisees. You will need detailed reporting of their operations and costs including sales, inventory, daily operational costs, labour costs and everything about their retail point of sales. So, communication is the key! Make sure, as a franchisor you are accessible easily with open communication channels that work both ways. With it, you can take out any report at any time regarding any aspect of your franchisees and even guide them on certain areas.

Figure out what lead to the success of your business and make sure it is replicated in your franchisees. This means you should clearly give them franchise advice, provide them with your business model, operation secrets, cost optimisation strategy, marketing and sales plans, and so on. Also, make sure that each of franchisees has access to these information and well adopt them for running their operations.  To have consistency between each of franchisees, it is necessary that they feel connected with franchisor brand and grow along. 

Franchising involves a lot of legal aspects i.e. agreement or contract between franchisor and franchisee, settlement of royalty fees, payment structure and so on. Thus, starting a franchise is also a matter of legal obligations between the two parties. If anything is ignored or overruled, there involves legal nuisances and fines/fees. So, before starting your journey, make sure you have a legal advisory by your side who will assist in making contract or agreement, dealing with royalties and avoiding any noncompliance in franchising to protect you from lawsuits. 

To make your retail franchising venture fail-proof, choose your territory wisely. Growth in retail products businesses is inevitable because the items are necessary in people’s daily life. However, to make your growth remarkable and faster, built a right plan for distribution or sales. It means selling your items to the right people at the right time. Poor location choices and unexamined franchisee shops can leave a franchisor in big trouble. It may even lead to higher costs of operations and lack of consistent sales.

 

Franchising is definitely the biggest leap ahead for any business, including retail. However, you should know how to franchise a business in the right way to avoid costs or making your business expansion plan fall flat. Committing any mistake or pitfalls can be avoided by consulting with experienced franchisors and consultants. By guiding you in the right direction, they will not only help to start your franchising business smoothly but will also help to derive the prominent benefits including expansion of capital, lower operations costs, reduction of risks and increased profitability.

The Author is a senior franchising consultant and owner of a franchise institute which gives all-round advisory to entrepreneurs on how to franchise a business successfully. He supervises a team of consultants who give useful franchise advice in new businesses, startups and existing franchisors on optimising their growth. 

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