Franchising is an ideal option for people who want to become entrepreneurs but are nervous about the risk. While traditional entrepreneurs have to do everything on their own, franchising mitigates risk by using a tried-and-true franchise business system. This system eliminates guesswork for franchisees and will help you get your business off the ground more quickly. But what, exactly, does it include?
Product or Service
The franchise’s product or service is the primary component of the franchise business system. When a traditional entrepreneur starts a business, they have to go through the trial and error of refining their product or service to fit the market. They have to test different features and pricing to find the balance between customer preference and business needs. But with franchising, all that work is already done. The franchisor has optimized the product or service and found the right price for it, so all you have to do is sell.
Operations
The franchise business system also includes operations: how to run the business to make it profitable and sustainable. Again, traditional entrepreneurs have to go through a (very expensive) trial-and-error process to find this sweet spot. But franchisees just have to follow a manual–the franchisor has already done the hard work. Your franchisor will provide guidance on everything from operating hours to suppliers to the stages and timing of business growth.
Technology
In most cases, a franchise business system also encompasses technology that enables the business operations. This technology typically includes software for tasks such as booking appointments, scheduling employees, and marketing your business. It may also include physical equipment, such as the milkshake machine for a fast-food franchise or exercise equipment for a specialty fitness franchise. Some franchisors require their franchisees to use certain technology, either because it’s proprietary and uniquely tailored to the business or because they have an exclusive contract with a supplier. Other franchisors simply provide discounts on technology or recommend the solutions they’ve found to be most useful. Either way, you save time and money on the trial-and-error of sourcing your own.
Hiring
A franchise business system also often includes assistance with hiring employees. At minimum, expect your franchisor to provide guidance on job descriptions, pay ranges, and how to onboard employees. Some franchisors also help with the hiring process or even handle all hiring and training through the corporate office. Your workforce is likely to be your largest expense, so this kind of assistance from the franchisor can have a major impact on the health of your business.
Training and Ongoing Support
A good franchisor provides training on all parts of the franchise business system. The type of training varies from company to company, but expect to receive at least a written manual. Most franchisors also provide some kind of online or in-person training, and many send a trainer or coach to the franchise location. The business system should also include ongoing assistance, such as tech support for proprietary software. Especially for first-time entrepreneurs, this kind of support can help ease the transition to self-employment and boost your odds of business success.
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