3 Wrong Mindsets When Preparing To Franchise Your Business

As with almost everything else, franchising needs to be built on solid foundations, and these foundations come with having the right mindset.

Related: Franchising Without A Franchise Consultant - Is It Playing With Fire?


Creating A Franchise Offering By Copying The Market


A business owner is looking for growth through franchise expansion and instead of engaging a franchise consultant for development work, chooses to create on their own a franchise model and payment arrangements. Unknowingly, or knowingly, the business owner is dumping unrealistic expectations onto franchisees.

The Right Mindset:

Even within the same industry, every business is different with distinctive needs and wants. The franchise model should be customized to the business, and associated payments should reflect its actual financial performance. If copying is adopted, how do you know if the initial and on-going payments you charge will allow franchisees to stay afloat?

Related: Franchise Fees & Royalties - What Is The Right Amount To Charge?

Deciding That Having An Operations Manual Is Redundant


The business owner believes the operations are made up of simple processes and there is no need for an operations manual. Instead, transfer of knowledge to franchisees will be performed through verbal teaching. When franchisees don’t operate in the expected standard, the business owner puts the blame on franchisees and thinks they are going rogue.

The Right Mindset:

Franchising is more than just ensuring the operations are effectively replicated. From the setup phase to customer experience, the franchise unit must be able to display the same characteristics of the original business. In fact, it is like setting up a whole new business so don’t assume franchisees, especially novice ones, to be able to digest everything with you just saying it verbally. Besides, in the event of a dispute or where your franchisee does go rogue, the operations manual could serve as fallback to the required standards. Furthermore, franchisees pay royalties in return for your operational expertise and knowledge so if you are offering none, what is it exactly are franchisees getting back in return other than being able to fly your brand’s flag?

Related: What Goes Into Your Franchise Operations Manual - Part 2: Determining Content

Confusing Franchise Enquiries With Franchise Sales


A business owner who starts to introduce franchising opportunities could experience an influx of enquiries at the early stages. With so much interest, the business owner may begin to have big hopes and dreams of becoming the next franchise phenomenon. When no one actually signs up as a franchisee, the business owner gets frustrated and wonders what went wrong.

The Right Mindset:

Don’t get carried away when there is an influx of enquiries for the franchise opportunity you are offering because most would probably just be curious or fishing for information. In most cases, you will be looking at a conversion rate of 2-3 out of 100 franchise enquiries. Don’t expect people to rush in and throw their retirement fund at you. Be patient - Rome wasn’t built in one day. Cheesy, but true.

Related: 6 Questions To Ask A Franchisee Before Signing The Contract

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