By following this step-by-step process, your initial journey into owning a management-style franchise should be smooth sailing
Investing in a management-style franchise offers savvy entrepreneurs the opportunity to put their skills in management and organisation to good use. This model is often most successful when the owner sees the value in the support of others to make it a success as, although you will be working on the business at a strategic level, you may not be working ‘in’ the business every day.
It’s therefore critical that imperative strategic decisions, like recruiting the right people for the right job, are given the time and expertise required. Here, Kevin Thackrah, director of pet care franchise Petpals, talks us through the steps to expect when investing in a management-style franchise. Having recently unveiled the new management model, Kevin draws from the recent formalisation of the management franchise opportunity several of his franchisees have been operating.
Step 1: Do your research
It’s essential that you take the time to explore all possible avenues when it comes to selecting the most suitable franchise before you invest. Also, make sure you’re not guilty of disregarding sectors because of a lack of experience – when it comes to management franchises, experience of the specific service you’ll be providing isn’t necessarily a prerequisite for success. As you’ll be recruiting a team of staff to support you in your new endeavour, the experience needed to be an effective manager comes down to good organisational skills and leadership qualities.
Step 2: Meet with the franchisor
This is a crucial stage of the initial enquiry and research phase. Meeting with the franchisor is an opportunity to ask questions that you may not have found answers to during any online research. And don’t be afraid to ask as many questions as you need to – it’s in the franchisor’s best interests for you to be completely satisfied with your investment. At the end of the day, a franchisor’s success is wholly reliant on the dedication of their franchisees and their success, so finding the prospects that are truly capable of following the model and committing to the brand will be their number one priority.
Step 3: Speak with existing franchisees
Who better to give you a real insight into the daily operations of the franchise – the positives and pitfalls – than an existing franchisee? And if the franchisor attempts to manage which franchisees you speak with then proceed with caution – what are they trying to hide?
Use this as an opportunity to ask the nitty-gritty questions that the franchisor may not be as well placed to comment on – like what, if any, additional operational processes they’ve put in place to increase productivity, how to spot the key talented individuals in their business and, obviously, what their relationship with their franchisor is like.
Step 4: Due diligence including territory mapping
Most franchise opportunities will allocate you an exclusive territory to protect the customer base that you will go on to create and grow – this is a key part of their commitment to your investment. If you decide to invest in an existing franchise where a franchisee is vacating, the parameters of that territory should already be established and you’ll have the chance to maximise the return from a good client base.
But bear in mind that this isn’t necessarily the case across the board - some franchise brands don’t warrant the need for exclusive territories at all. At Petpals, our franchisees’ territories are completely protected, as this is an essential element when growing your franchise.
Step 5: Business plan
A business plan is an essential step for any entrepreneur and vital to your success. Your franchisor will equip you with a whole host of information – like start-up and running costs – and will then happily support you to put together your business plan, as it’s very likely they will have supported the other franchisees in the network to write theirs.
Your business plan must include factually correct information relating to the description and overview of the business and service – particularly as you’ll be operating within the parameters of your franchise agreement. You will also need to include a comprehensive marketing plan, proof of detailed due diligence and market research – carried out by you, the franchisee – a detailed financial management plan and your projected growth within the first five years. And because you’re investing in a management-style franchise, even though you could be working hands-on, initially you should provide detailed information about your employee structure and how you’re proposing to develop the business day-to-day.
Step 6: Secure funding
Before you can even consider investing in a franchise, you’ll need to ensure you have access to the required liquid capital to get the business off the ground. This funding could come from your own personal savings, or you may need to look into borrowing from a lender. Franchising is usually seen as less of a risky investment by banks – especially those used to working with franchise brands. Contact one of the leading high street banks – most of which have experience of working with franchises – to explore your options.
Step 7: Search for talent
As the name suggests, at the core of developing and growing your business, you will be managing other people. Therefore, recruiting the right team of people to deliver your service or product is crucial.
Although the decision will ultimately be down to you, any quality franchisor will offer guidance on how to recognise talent at the interview stage. It’s also imperative that you feel comfortable with the interview process in its entirety; this is also something your franchisor can help with. Utilise their experience in successful recruitment and call on them for advice where it’s needed.
Step 8: Marketing and PR - including launch programme
From the moment of investment, there should be a whole host of brand profile-raising marketing materials at your disposal, before, during and long after the launch of your business. It’s a given that this activity is especially crucial in the weeks surrounding your launch or official takeover date. But what franchisors can offer you does differ from brand to brand. Some franchisors may take the lead entirely and guarantee you initial business leads and others may have a defined set of activities where you take responsibility for ensuring they’re completed.
Step 9: Ongoing talent management
At the end of the day, quality recruitment is a marathon, not a sprint. Getting the right team in place is a balancing act and to keep quality loyal staff requires a great workplace culture where people feel rewarded. So, keeping on top of your people management and development is imperative.
Although your franchisor won’t be working on your business with you on a daily basis, they’ll give you the tools to recognise trends and monitor progress, ultimately highlighting when you’ll need to ramp up recruitment efforts as your business grows and provide guidance and advice along the way.
Step 10: Review business plan including exit strategy planning
Ongoing support should be available throughout the lifecycle of your franchise, including the time at which you choose to plan for retirement or move on to pastures new. A quality franchisor will ask you what your ultimate aim is from becoming a franchisee before you invest.
At Petpals, we’re proud to have honest, ongoing conversations with our franchisees about their options when they do choose to plan their business exit. In some cases, they’ll have already found a suitable prospect to take over from them. Otherwise, we’re happy to support sourcing a replacement so that you get the best possible return on your investment.
By following this step-by-step process, your initial journey into owning a management-style franchise should be smooth sailing. Think of this 10-point checklist as your starting point to guide you through your shortlist of franchise opportunities and onwards through your investment.
Kevin Thackrah is the director of Petpals, the UK’s largest multi-service pet care franchise.