Learn about the journey to building a thriving franchise system from the ground up.
When launching a new franchise system, it can be tempting to look for ways to skip the line and jump straight to success.
But differentiating good advice from bad can be tricky for new franchisors. From one-stop-shop developers promising to handle every aspect of franchising for fees that are too good to be true, to a seemingly endless stream of books, articles, workshops and events, separating real information from gimmicks – and knowing what will work for your business – can be daunting.
“The tough reality is, there's no magic bullet. There's no secret sauce. (New franchisors) are not missing something. It's not like somebody just needs to tell them what to do, and they can do it. It's different for everybody,” says Laura Coe, the founder of Snapology, a children’s enrichment franchise with over 180 territories across the globe, whose private equity exit made headlines in 2021.
Still, there are some steps new and emerging franchisors can take to make sure they’re starting their franchising journey out on the right foot … and heading in the right direction.
Steps to take after you franchise your business:
- Embrace the challenges of franchising
- Lay a strong foundation for your franchise system
- Learn into marketing and technology
- Focus on organic franchise growth
- Align with the right people
1. Embrace the challenges of franchising
For franchisors that are new to the industry, adopting the right growth-based mindset is critical. That means embracing the challenges of franchising and accepting that success doesn’t usually happen overnight. Instead, it often requires years of hard work – and a five-year success plan to keep things on track.
Some factors that can make a difference in eventually achieving success as a franchisor include, but aren’t limited to, the following:
The right time. It’s important to determine the right time to franchise your business. Make sure your numbers are strong, your systems and processes are solid and your business is properly capitalized.
The right product or services. Offering the right product at a time when there’s enough public interest can help create momentum.
The right attitude. Franchising is different from owning a business, and it’s important to adopt a mindset that’s based on growth, supporting franchisees and closing deals.
For Coe, who says she believes franchising success is 90% perseverance and 10% luck, embracing the industry’s challenges also means being unafraid to experiment with new strategies, even if they don’t necessarily work for competitors.
“I think the key is to try different things and double down on what works for you. Because what works for you may not be what somebody told you to do. It may not be what worked for somebody else – even somebody else in your industry,” Coe says.
2. Lay a strong foundation for your franchise system
Although the foundation for every franchise system will depend on its industry and budget, it’s important to make sure your new business is legally compliant, properly structured and able to grow over time.
To establish a strong foundation for your franchise system, consider the following:
Laws and regulations. Work with a franchise attorney to build a rock-solid legal foundation for your business and ensure compliance with state and federal franchise laws.
Systems and processes. Develop a replicable business model and an operations manual to answer franchisees’ questions about procedures and processes.
Adaptability. Your brand won’t look the same on day one as it will during its fifth year in business, so it’s important to make sure your business structure can adapt to change.
It’s also important to remember to continuously update and improve your franchise operations manual as your brand matures.
“The operations manual is a living, breathing document. For us, it lived on Google Drive. It was in a Google Document, and the leadership team at Snapology always had access to it. And so anytime something would happen, or maybe even just like a help desk question, somebody would be like, ‘Boy, that should really be in our operations manual,’” Coe recalls.
3. Learn into marketing and technology
In an increasingly online world, having a digital presence is critical for growing your brand and attracting new business.
When it comes to marketing and technology best practices, it can be helpful to work with a professional marketing team to develop strategies for promoting your brand, including the following:
An optimized website. Beyond a good design, making sure your franchise sales website is SEO-friendly can increase its discoverability in a competitive online marketplace.
A well-crafted story. By sharing a compelling brand story that focuses on your journey from business owner to franchisor, you can attract like-minded franchisees and loyal clientele to your brand.
An established sales process. When a prospective franchisee candidate reaches out, it’s critical to have a franchise sales discovery process in place that can convert leads.
A marketing strategy. Whether you handle it yourself or work with an agency, having a marketing strategy is critical for growth.
At Snapology, Coe says she preferred working with marketing professionals to ensure the brand’s website was optimized and could reach prospective franchise buyers and customers effectively, and brought the marketing team in-house as soon as it was feasible.
4. Focus on organic franchise growth
While many new franchisors may wonder if working with franchise brokers is a good idea, focusing on organic growth is often the best course of action when you’re just starting in the industry – particularly due to the fees associated with broker-related sales.
“Some years, 100% of my franchise fee went to pay the brokers, and in other years, typically about 75%, so you've got to have a good website to get some of that organic growth so that you can have that revenue to invest in other areas,” Coe says.
Still, working with brokers can have benefits due to the expanded sales opportunities and momentum they can provide. Because of that, new franchisors should take time to understand what franchise brokers look for when evaluating a franchisor before working with one.
5. Align with the right people
Although new franchisors often feel like they need to be able to handle every aspect of their franchise system, it’s important to identify your strengths and weaknesses – and to know when to ask for help.
New and emerging franchisors might benefit from the support of experts in areas including, but not limited to:
Legal. Franchising is a heavily regulated industry, so it’s critical to work with an experienced franchise attorney to ensure compliance with franchise laws.
Franchise development. If you’re unfamiliar with the franchise industry, it can be helpful to work with experienced professionals to grow your business.
Marketing. Having a team that understands how to reach your target demographic can be invaluable when you’re getting started in franchising.
Technology. Developing digital solutions for customers and franchisees can be a game-changer when scaling a brand.
Accounting. Tracking your brand’s financial performance is critical for growth.
Franchise sales. Depending on your experience and position in your industry, building trust with franchise brokers can be valuable.
Although one-stop-shop franchise developers sometimes claim to offer every service new franchisors need to launch a new franchise brand, those promises can sometimes be unrealistic – and can even set franchisors up for potential liability in the future. Instead, it’s a good idea to do due diligence and conduct careful research to ensure that you’re working with experienced, well-qualified professionals who have your brand’s best interests in mind.
For anyone just getting started as a franchisor, it’s also a good idea to set realistic expectations and know that you don’t have to be an expert in every area of your brand. Remember that franchising – like everything in business – is a journey that requires time, dedication and a willingness to learn and grow from mistakes.
“I always had – what do they call it, ‘imposter syndrome.’ I always felt like, I don’t know what I'm doing, what am I missing? If only I had more franchise experience, if only I had more experience in fran dev, then I'd be successful. But nine times out of 10, that's not the case,” Coe says.
