Developers are a critical resource – but it’s important for emerging franchisors to stay in the driver’s seat.
KEY TAKEAWAYS:
- As a new franchisor, hiring a consultant to grow your new franchise system might sound like a good idea – but it often isn’t.
- Instead, taking the lead early and staying in control of your brand’s growth over time can have advantages.
- For emerging brands, building validation and getting involved in the sales process can sometimes be more valuable than an expensive marketing campaign.
As a new franchisor, hiring a consultant to handle every aspect of your brand’s development might sound like a smart strategy.
But while there’s no shortage of developers offering shortcuts and promising to handle everything from lead generation to the franchise sales process, legal and more under one roof, founders should think twice before handing the reins over to someone else. That’s because, like all things in business, when something sounds too good to be true, it often is.
In this article, we'll explain why new and emerging franchisors can’t outsource success – and why founder visibility is often the most important driver of early franchise growth.
Strategies for Taking Control of Franchise Development
As an emerging founder, getting involved in the franchise development process is critical for the long-term success of your brand. By following best practices and taking an active role as a franchisor, you can build validation and control the direction of your brand.
1. Get educated
Although it can be tempting to skip ahead to the next level as soon as possible, it’s usually best to wait until your brand is ready for each stage of the franchising process. Early on, stay focused on education to prepare for future growth.
Some important concepts to explore as you learn about franchising include, but aren’t limited to, the following:
- Legal. Consult a franchise attorney to learn about the process of franchising your business, including preparing your Franchise Disclosure Document (FDD), franchise agreement, registrations, notices and other important foundational requirements.
- Financials. Learn which financial statements and information you’ll need to prepare to franchise your business and find out how to evaluate your unit economics.
- Costs. As a franchisor, you own two businesses – a corporate entity and a franchise entity. Take time to understand the expenses, fees and capital requirements associated with each one.
You can learn about the franchise industry by attending workshops, seminars and masterclasses, consulting a franchise lawyer or developer, finding a mentor and doing your own research using credible sources.
2. Build brand assets
As a new franchisor, selling franchises is an important part of growing your business. To competitively position your offering in a crowded market, season your brand before scaling by building brand assets and generating a strong return on investment for franchisees. As a franchisor, boosting franchisee profitability may also strengthen recurring royalties – creating a win-win situation for everyone.
3. Play an active role
Although it only takes 90 to 120 days to franchise your business, building a thriving brand can take years. Because of that, growing slowly during your first few years and engaging directly with franchisees and candidates is critical.
To maintain control, stay visible as a founder and participate directly in the following areas of the franchise development process:
- Development. Focus on growing slowly and building a durable, founder-led franchise system. Create a compelling franchise sales website and marketing materials that convert and prioritize franchisee success at every stage.
- Franchise sales. Low-budget lead generation rarely works, and commission fees add up. Instead, get involved in the process by making yourself available to candidates and participating in recruitment, discovery and franchise sales.
- Validation. By making franchisee success your number one priority as a franchisor, you can build validation and make your brand more attractive to prospective buyers while boosting your brand’s ROI value.
Founder participation and visibility can have a positive impact on growth. By getting involved in lead generation, recruiting and the franchise sales process, you can avoid wasting money while building validation with your initial franchisees.
4. Choose the right partners
Although there are plenty of excellent developers out there, disreputable consultants sometimes offer new franchisors “magic bean” promises of unrealistic growth and generic “all-in-one” packages that underdeliver.
To avoid wasting time and money on the wrong partners, do due diligence and consider the following questions before hiring a consultant:
- Customization. Is the consultant willing to customize their services to meet your brand’s unique needs?
- Collaboration. Will you maintain autonomy as a franchisor and follow a collaborative decision-making process?
- Education. Will you be empowered through educational resources or franchise development events like FranCamp?
- Realistic goals. Does the company set realistic goals, or are they making false promises to lure you into unnecessary spending?
- Successes and flops. What is the consultant’s best success story – and their worst failure as a franchise developer?
By asking the right questions and staying alert to red flags before hiring consultants, you can increase your chances of finding a partner whose values, goals and services align with your brand’s needs.
Summary
As a new franchisor, you don’t know what you don’t know. Hiring a consultant to provide guidance and expertise can add a critical resource to your franchise development toolkit. However, it’s important to stay in the driver’s seat to avoid losing control over the direction of your brand.
By seasoning before scaling, educating yourself about the franchise industry and following best practices like building brand assets and actively participating in the franchise sales process, you can increase your visibility as a founder and build validation with franchisees without sacrificing control over your brand’s development.
Still have questions about franchising your business? Schedule a franchise assessment today.
Frequently Asked Questoins
Although hiring a franchise consultant can be valuable for new franchisors, it’s important to lead early and stay in the driver's seat to avoid losing control. By getting involved directly in the development and sales process, you can direct your brand’s growth over time.
To avoid being taken advantage of by unscrupulous developers, new franchisors should do due diligence and ask critical questions about consultants’ background, expertise and past successes and failures before hiring a consultant.
New franchisors often fall for “magic bean” promises made by disreputable developers who overpromise and underdeliver. Instead, it’s important to stay involved in the development process and set realistic goals for growth and development to avoid wasting time and money.
