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Franchise Diary

10 ways to prepare your business for franchising to others by Brody Sweeney

I’m Brody Sweeney, the founder of Camile Thai Kitchen, an award winning home delivery franchise.  This blog is not about my business, but rather some advice for if you’re thinking about franchising, or indeed already involved in it – and want to learn more.

Franchising your business so others can benefit from your winning concept is a rewarding and lucrative way to expand your concept – if you get it right.

There are some fundamental things that good companies do, to give themselves every chance of franchise success. I’ve distilled them below into 10 things you can do which will substantially reduce the risk of it all going wrong.

 

  • Establish a pilot business – test, test, test.

The very essence of every successful franchise is a proven concept. Until your concept is proven, forget about franchising it. You may be coming from an existing successful company owned business, in which case you have half the job done.

But if yours is a fledgling business, then your first job is to get the business model right, and make sure it is replicable.

A good franchise is one where there’s enough customers out there, willing to pay the prices you charge, so you and your franchisee can earn an acceptable profit from it. If you are making too much money, the franchisee can’t, and vice versa.

  • Understand that by franchising your business, you will be running two separate businesses.

Many business people who have developed a successful business think that franchising is something you bolt on to the existing business, like a new product line.

In fact, deciding to franchise your business is like setting up a wholly new business from scratch. The wise operators recognise this, and treat it so.

In my company Camile, we figured out how to run our restaurants as a B2C (business to consumer) business. This involved getting our product range, pricing and marketing right, to make the business appealing to potential customers. This business thrives on thousands of relatively small transactions each week.

But going into franchising is a B2B (business to business) project requires a completely different mindset. Now you’re tailoring your business to a small number of prospective franchisees who have very different requirements than your retail customers. This part of the business has a small number of transactions, for a much higher value.

  • Research your market for similar franchises.

Finding similar businesses who are already doing what you are makes for good shortcuts as you think about and design your own business model. You can perhaps see what their franchise marketing material, their agreements, their website etc. are like before you build your own, and you can be inspired by the good bits of what they do, which you can then incorporate into your own business model.

I have never been one for reinventing the wheel, when there are great businesses out there, who have already done at least part of what you are planning. The important part is having your own USP  (unique selling proposition) and holding onto that – the structural components are bound to be roughly the same.

  • Get a demographic study completed of your target market

In the old days, picking a good location for your business often came down to local market knowledge and “feel”. This may have got you going, but as you grow your network and particularly as your franchisees start risking their money, a more scientific approach will reduce the risk of picking the wrong location.

There are many companies who can assist you in this. Often the works starts with analysing your most successful existing businesses, and why they are successful. Is it to do with the demographics of the area, or the lack of competition, or proximity to a suitable anchor business. Answers to these types of questions can help you get ever closer to the perfect site, and probably more importantly minimise the poor locations (which every chain business has).

  • Protect your trade name.

One of the main assets of your franchise business is your trade name, and prospective franchisees will expect that you have properly protected it so others cannot use it.

This of course implies that you pick a name that is suitable for trademark registration. When we came up with the Camile name (which we did by putting 10 names down on a form and asking 200 people which was their favourite) it had two “ll’s” and was spelt “Camille” – a common French name for a boy or girl – and not trademarkable as it wasn’t unique. However, I realised that if we took one of the “l’s” away  – to make “Camile” – this would be trademarkeable, because it was unique.

  • Write your processes down in a manual.

One of the key things a new franchisee buys off you is your experience in running the business – what to do, and more importantly what not to do.

Capturing all the right ways to do things in a manual serves two purposes. One is to capture good ideas, and ways to do things, so that everyone can share them. Secondly if you share these things with your franchisee through an operations manual, and something is not then done properly, it is clear where the responsibility lies.

  • Seed the market for prospective franchisees.

Getting your first franchisees off the ground is a long drawn out process. It can take a long time. In Camile we started marketing our franchises in 2012, but didn’t open our first franchise until three years later in 2015.

For this reason, you should start seeding the market well in advance of when you actually plan to open your first franchised outlet. Seeding the market means starting to get your name out there in front of prospective franchisees. It doesn’t have to cost a fortune. Franchise Opportunity websites, limited social media marketing on LinkedIn and Facebook can all help.

  • Do anything to get your first proper franchisee on board

Not everyone likes being a pioneer, and not a lot of prospective franchisees will want to be the guinea pig as you get your new franchise off the ground.

For this reason, you should do anything within reason to get your first franchisees on board. If your thinking long term, then the initial fees in the big picture for a first outlet, may not be so important. And the royalty fees could be staggered, to reflect the newness of the business.

In Camile we’ve done things like given a soft loan to help a franchisee make up a cash shortfall, or discounted the royalty for the early years (never have we reduced the marketing contribution, because we need that to build the business).

  • Be so careful with your first few franchisees

It’s so flattering to have a stranger express an interest in your new franchise that it can be hardc to turn a new franchisee down. In Camile, we currently turn down about two-thirds of prospective franchisees for a variety of reasons.

If your first one or two franchisees are not right for the business, that can mean the end of your franchise before it gets started properly. Selecting franchisees (and vice versa  – a franchisee selecting you) is not an exact science, but I have found the following analogy helpful. Getting involved with franchisees is like getting married in a business sense. Your new franchisee will agree to be with you, in our case for 10 years, so it makes sense to get to know them as well as possible before making a commitment to them. After receiving an application form (the first indication of intent and commitment), we do a discovery day, where the prospective franchisee gets to meet all our team, and see who is running the business. We then do a psychometric test, and follow that with observing them working a shift in one of our branches.

  • Consider using a franchise consultant

After almost 40 years experience in franchising, and understanding pretty well the nuances of the business, if I was starting again, I would use a good franchise consultant to educate me about the business.

There are many things all new franchisors should do – from registering the trademark, to writing operations manuals, to creating a website and franchise prospectus, and a myriad of other details that will be expected and demanded from serious prospective franchisees. A good consultant (and they’re not all good) will give you peace of mind, and make sure you do it right.

I have been involved in launching three different franchises in my career, and like Murphy’s Law, it costs twice as much, and takes twice as long as planned.

Doing it right from the start not only should make it quicker and more cost efficient, but will give you the best chance of getting past your first few franchisees, and go on to develop a larger business.

Good luck and stay safe.

 

Want to learn more about Camile Thai? 

Follow us on LinkedIn

Camile Thai Picture Conor McCabe Photography.


10 ways to manage the finances of your business during the pandemic by Brody Sweeney

I’m Brody Sweeney, the founder of Camile Thai Kitchen, an award winning home delivery franchise.  This blog is not about my business, but rather some advice for if you’re thinking about franchising, or indeed already involved in it – and want to learn more.

Making sure your cash doesn’t run out is arguably one of the most important things you have to do with your new business. Inevitably things cost more than you think, and business takes longer to pick up. If you run out of cash while this is happening, the game is up. I’ve set out below my best thinking about how to make sure you don’t run out of money, before your business gets established.

  • Stop the bleeding.

Even though we are well into the crisis, and you would imagine that all costs have been cut as much as they can, reality is only now setting in for many business owners – particularly that the recovery may be in the distant future. If you haven’t stopped the bleeding, you won’t make it. Income supports and grants have given many a false sense of security, but you are paid to be a leader, and putting off tough and hard decisions is not being a leader. Act now, you owe it those whose jobs can be saved.

  • Make a plan and adjust as you go – early and often.

Having a road map out of the coronavirus crisis is a vital step to getting your business to a steady and profitable state. And even though you know intellectually that your plan wont work out exactly as you think – there are so many things you can’t control – its still better to have a plan, that you continually adjust to achieve your objective.

The plan you may have prepared at the start of this is by now probably completely out of date, and you need a new one, reflecting the new realities as soon as you can.

Preparing a new plan starts with an honest analysis of where you are today, not three months ago. Look at the 4 main areas of your business – finance, marketing and sales, operations, and HR and be hard. Tell it as it is. From this honest analysis should come a detailed vision of where you now think the company could get to with a reasonably fair wind – under the same four headings. And finally, a detailed plan of what the business needs to do over the coming 12 months to make concrete progress towards your new vision.

Knowing things wont work out as planned, means you need to be prepared to adjust as you go, and keep adjusting – daily, weekly or monthly – until you are on track to achieve your objectives.

  • Constantly update your running cash flow.

Running out of cash is how most businesses grind to a halt, and in the fast moving and highly unpredictable environment around the virus, you need to keep on top of where you are with your cash. Making predictions as new information comes to hand, and you see your actual trading performance, allows you to update your projections, and anticipate cash problems before they happen, so you can take action.

  • Find out and use available supports.

Refresh yourself as to what supports are available to you to help your business during the crisis. The obvious one like the pandemic payments and Tax warehousing you will probably have availed of already, but there are a plethora of new state supports including restart grants and online retails scheme – as well as cheap ways to borrow money, with a partial state guarantee, that may have been introduced since you last looked.

  • Don’t pay yourself too much.

No one likes taking a pay cut, and what’s obvious to you, you’re intricate knowledge of the business, may not be as obvious to an ill-informed employee. Lead by example, by taking the largest pay cut for yourself, if that’s necessary.

  • Get a good money person around you.

Having the comfort of someone really good with money, at your side, during a crisis make life a lot easier. The wise counsel, and unemotional help with decision making is very valuable. If you are not blessed with one already (which could be from an external accountants), then do yourself a favour, and make it a priority to get one.

  • Communicate with everyone affected by your financial decisions.

The pandemic is a time to over communicate with anyone who may be affected by your financial decisions. At the outset of the Lockdown, we cancelled all our direct debits. We communicated this and the reason why with our suppliers. As soon as it became apparent that our business was not being badly affected, we re-instated them – and communicated this and the reason why to our suppliers. We communicated with staff about wage cuts, with the bank to re-assure them we were OK, and with landlords as we needed. Especially with the staff, who were worries about losing their job, or getting sick – it removed a lot of the stress and worry they may unnecessarily have had.

  • Run weekly profit & loss accounts

Keeping a close eye on the financial performance of the business, not just your cash flow – keeps you close to when you have to make decisions that reflect the business that you are actually doing, as opposed to what you projected.

In our business, we run weekly Profit and Loss Accounts for each restaurant, and these become a tool with which we can measure the effectiveness of our decisions, and the wisdom of our managers. If we weren’t measuring that frequently, bad stuff could be building up, that we are too late acting upon.

  • Measure your KPI’s and act on them

Undrstanding the effect that lower sales are having on your KPI’s is no brainer information for your business. It is a fact that model margins for labour as an example, are much harder to achieve with lower sales. Most businesses have 3 or 4 key numbers that explain the businesses health. If you aren’t running those numbers at least on a weekly basis, your not running your business properly.

  • Double down on pockets of current or future growth

While your traditional business model may be in trouble during the pandemic, resourceful companies are exploring new ideas and ways of doing things. This is a time for speed over perfection. As you find pockets of business that are doing well – for example takeaway meal kits have worked really well for some restaurant businesses that were not able to do dine in business. Smart owners have doubled down on this new and unexpected source of revenue.

If I have any good advice to give around running the finances of your business, it’s this: get a Shabu. From the beginning, my co-owner and accountant Shabu Mani took charge of the money – making sure we kept our books up to date, and that we knew exactly where we were at a given time. He also sense checked me when I wanted to try something, and became quite mean, when money was tight – exactly what you need with an accountant.

These are taxing times for many businesses, and keeping control of your finances seems obvious. But with so many other aspects of the business occupying your thinking and time – losing track of the money, or indeed running out – can bring the whole pack of cards down.

Good luck and stay safe.

Want to learn more about Camile Thai? 

Follow us on LinkedIn

Camile Thai Picture Conor McCabe Photography.


10 Tips to Manage COVID-19 as a Business by Brody Sweeney

I’m Brody Sweeney, the founder of Camile Thai Kitchen, an award winning home delivery franchise.  This blog is not about my business, but rather some advice for if you’re thinking about franchising, or indeed already involved in it – and want to learn more.

Far too many businesses, both franchised and not, have found the ground torn from under them as the pandemic took hold. If you are one of those finding it hard, I’m setting out some ideas based on how we have been managing the pandemic. We have been incredibly fortunate, despite the trauma experienced by the restaurant industry at large. Camile Thai began the pandemic with a 30% hit to our sales – and we needed to find a way out of it. Through some hard work and clever thinking, we made it work. 

1. Have an opportunity brainstorm.

In the immediate aftermath of the lockdown, a kind of shock pervaded the business world, and many were paralysed into inaction. But not everyone.

Some entrepreneurs have put their heads up, to think about what new business opportunities are presenting themselves. Every crisis gives rise to opportunity, and it’s possible your business could pivot into a new direction which didn’t exist before.

Restaurants that never did takeaway before doing takeaway now. Pubs delivering pints out of vans with beer taps fitted. Wine distributors selling cases to the home instead of to their restaurant clients. Get together with your team (if your business is really small, invite in some friends and colleagues) and brainstorm how you could change direction into a temporary or permanent new direction.

We then tested our new ideas as quickly as we could. This is a time for MVP’s – Minimum Viable Products – where you can get a prototype out to real customers before getting it perfect. The guys who put the beer taps into the back of the Van didn’t wait around to conduct research, or design the perfect looking van – they just got it out there, and got immediate feedback.

2. Be absolutely honest with yourself. Consider going into receivership and starting again.

Absolute honesty is necessary if you are to survive the next period. Avoid wishful thinking and hoping yourself into a better position. I read last week about one of our role model businesses in the U.K., Pret a Manger, who have reopened and are doing only 20% of the sales they were doing prior to lockdown. Pret needs to have a very honest look at their business, because no amount of wishful thinking is going to bring customers back before they are ready. 

One unpalatable option is receivership. If your situation is so terrible that it can’t be turned around, maybe better to bite the bullet and start again, than to flog a dead horse.

You know best your own business. And as the old adage says, you can fool other people for a while, but you can’t fool yourself.

3. Make a one year plan.

It is all about the next 12 months. Survival. So why might you have long or medium term aspirations, if you don’t exist in 12 months time, they’re all academic.

Make a plan for the 4 key areas of your business – in fact the 4 key areas for all businesses – Finance, Marketing, Operations, People.

We know before you start the plan, that it won’t work out exactly, but that doesn’t matter. As you execute your plan and an aspect isn’t working, change it. Then change it again, and keep changing it until you get it right.

4. Where you can, cut costs immediately.

Preserving cash is the only way you can survive until things improve. Defer payments immediately if not already done so – you can figure out later how to pay the deferred amount back. The point here is that if your business is down, and you pay all your bills as due, you might not survive. Contracts across the business world will have to be renegotiated. You’re not alone bending your contracts now – if that’s what it takes to survive.

Cut any discretionary expenditure that you can. Subscriptions, consultancy, travel, bonuses etc. should all be up for grabs.

5. Commmunicate, communicate, communicate

Keeping in close touch with all your stakeholders is not only the right thing to do, but it makes good business sense as well. When you’re not able to have face to face meetings in person, then video calls have been a godsend. I personally never made a video call before the crisis, and now I’m never off them.

On the suggestion of our Head of Marketing Daniel, our leadership team commenced daily morning video call, and we have stuck religiously to this since then. I feel we’ve never communicated better as a team, and we have decided to keep this communication up as the crisis subsides (fingers crossed!)

We’ve also made special efforts to keep in touch with the rest of our teams, including all hands video meetings and regular staff updates about what’s happening in the business. And the results of all this communication ? Less misunderstandings, less stress for our teams, and a better team spirit – all these are so worth having.

6. Keep perspective and ask for help.

For one of the few times in my business career, most businesses in my industry of hospitality are in trouble at the moment. You’re not alone.

Trying to figure out what to do when something like this hasn’t happened before is really hard. This is the time to call in favours, and lean on others you respect and admire for help and support. We have made a point of reaching out to businesses to support others in our industry at what we know is an awful time for them. And we’re not alone. The spirit of help and camaraderie from notional competitors across the business community is inspiring.

I know (from bitter experience!) when you’re in the shit, it’s hard to keep a sense of perspective. And when you don’t have a sense of perspective, you can end up making poor quality decisions. Talking to other industries, to people who are not emotionally involved in yours, can help you stand back, and look critically at where you’re at and where you are going.

7. Mind yourself and those around you.

I’ve never worked harder in my life than during the pandemic. The lines between working and home life become ever more blurred. Finding the mental space or time to look after yourself both physically and mentally, go out the window.

But looking after yourself is a critical element of fixing your business. If you are crushed physically or emotionally, you don’t make good decisions. Your business requires you to look after yourself.

Personal relationships can fall victim to your stress, and add even more stress on. Minding those around you, who are dealing with their own issues, is expected. When you are there for them – you feel better about yourself as well.

8. Celebrate the little wins.

There’s enough bad news and uncertainty out there to last a lifetime. So celebrating little wins is a welcome antidote to the negativity that surrounds us at the moment.

9. Lead from the front.

This is not a time to be a shrinking violet. Even though your world may be full of uncertainty and stress, your team is depending on you to give clear direction. Put on the brave face, put yourself in their shoes – understanding their fears and uncertainties, and give them a sense of a compelling future.

10. Remember the lessons you’ve learned from this period – they will come in handy again.

There’s no escaping that this is an awful time for a lot of people in business. You can’t control many aspects of the external environment, but that doesn’t mean you should be paralysed by indecision or lack of leadership. Put on a brave face and work hard for solutions. Making difficult decisions and innovating your way out of trouble are the qualities that will set you apart from the herd. And that is a quality that will never stop being useful to you. 

 

Want to learn more about Camile Thai? 

Follow us on LinkedIn

Camile Thai Picture Conor McCabe Photography.


10 Personality Traits of Winning Franchise Owners by Brody Sweeney

I’m Brody Sweeney, the founder of Camile Thai Kitchen, an award winning home delivery franchise. It’s my third and most fun franchise business, and after 40 years in the franchise industry, I guess you could say I’ve seen a lot – good and bad – about this industry. This blog is not about my business, but rather some advice for if you’re thinking about franchising, or indeed already involved in it – and want to learn more.

 

A misconception with prospective franchisees is the belief that sticking a franchisors name over the door means instant success. What they don’t realise is that a franchise is made up of individual business owners, and that is where the real success lies. The franchisor’s most crucial job comes at the early stage – to make sure they choose the right franchisees for their brand.

When my franchise brand is scouting a prospective franchisee, we spend as much time as we can learning about them and their personal goals. I’ve discovered our best franchisees all have the following traits in common. Do they sound like you? I’d love to talk to you.

1. You don’t want a job. You want a business.

The key difference between owning a business and having a job is that in a business, you are totally responsible for the performance of the business. 

This can be a huge misconception for prospective franchisees. They may be coming from a corporate environment, where the actual performance of the overall business is someone else’s problem. You go home in the evening, and get to relax, secure in the knowledge that your salary will be paid, and your job secure.

Not so in your own business. Every little decision you make has repercussions – good or bad. If you’re making a mess of things and not fixing it, there’s only one place the results of that are going to land, and that’s with you.

2. You love working with people.

All franchises involve you working with customers, and most involve you building a team. If you’re not great with people, then starting any new business, never mind a franchise is probably a bad idea.

I had a friend once who lived in a big house. He was very comfortable in his own company, and didn’t really like visitors. When he told me he was thinking of putting the house on Airbnb, I didn’t think twice about persuading him that this was not a good idea. He didn’t like friends coming to his house, never mind complete strangers!

We conduct psychometric tests with prospective new franchisees, partly to find out about this. Someone could be totally happy as a desk jockey – but for most businesses, you need to love people. 

3. You are resilient, and know how to bounce back.

For most people, starting a new business is one of the most difficult and challenging things they will ever have to do. It’s not just the physical bit of working 12 hour days at the start, but the mental side of dealing with stress, deep disappointments, and crazy highs when you think you are a rock star. All businesses have highs and lows, and require exceptionally hard work, often for extended periods. You need to have the stamina and positive mental attitude to keep going, even in the difficult days.

3. Life never turns out exactly as your business plan thinks it will.

A business plan is a vital element of your preparation for opening your new business, and a good one gives you a road map, down which you drive yourself and your business.

But when preparing a business plan, you need to understand they never work out as planned. You will either do better than you think (this is a good thing), or worse than you think (not so good), but it is extremely rare for a business to perform exactly as predicted.

It’s a fact that all banks love business plans and insist you prepare one, but also know the predictions will not hold true. As one bank manager friend said to me “Brody, I have never seen a business plan presented to the bank that did not show the bank being repaid in full and on time”. This was not the bank’s actual experience in very many cases.

Of course, because very many business plans don’t work out exactly as planned, it’s your capacity as a business person to adjust your plan, and keep adjusting it, until you get it right, that’s what separates the winners from the losers.

5. You are excited about moving outside your comfort zone.

Being in business for yourself often involves you having to do things that are really hard, and which in normal circumstances you would like to avoid. Having to let someone go is one. Another good example is cold calling. To go and knock on a stranger’s door, offering your life’s work for sale is really tough. But a successful business in many franchises requires just that. If you know your hit rate is just one in twenty, then you know your audience and learn to plan accordingly.

Unsuccessful business owners will try it, slow down when the going gets tough, and then make excuses and stop entirely. Successful ones get it, and when they get the rejection, brace themselves as they stand in front of the next door.

6. You know when to step back and trust the brand’s decisions.

Being in a franchise means you have to sacrifice some of your independence, and toe the line. The prize for your patience is greater and more secure profitability. You might want to paint your shopfront neon green and sell Pizza, but at our Thai restaurant chain you’d have to walk over my dead body before I let it happen. That’s because your franchisor realises that a brand is about reliability, consistency, and a common standard. Common standards adhered to by all the franchisees is the best way to ensure the common good.

If you’re someone who really likes making all their own decisions, you might find the restrictions placed on you as a franchisee very frustrating, and you could be better off on your own.

7. You take comfort in being part of a bigger community and team.

While your franchisor will want you to observe their brand standards, keep to their standard operating procedures, and promote the brand in the same way as all the other franchisees, they also need you to be a motivated self-starter capable of making decisions and getting things done.

This is about you being in charge of running your own business, and doing whatever it takes to make the business successful. Disaster for the franchisor is a franchisee who waits to be told what to do all the time.

8. You consider yourself a disciplined person.

Running any business requires huge amounts of personal discipline if it is to be successful. For example, in our retail restaurants we have been extremely disciplined about cash. We take cash very seriously, because if we don’t it has a habit of disappearing in an unexplained way. 

It’s so easy to lose money in business if you are not carefully watching your key performance indicators, and taking appropriate action where you are not meeting them. It’s very hard in the stress of opening a new business to sit down and work out your margins for the previous week, but if you want to avoid unnecessary losses and potentially running out of cash, you need to have the discipline to do these calculations every week.

9. You have to put customers and staff ahead of yourself.

It’s mostly a laughable misconception, at least in our company, that fat cat business owners exploit staff & customers to make huge profits for themselves.

Modern business owners realise that to generate consistent sales, you need to deliver great service, and put the needs and wishes of your customers at the centre of your business strategy.

Great service comes from staff who are happy with their work. And if they’re not happy in their work, your customers will notice it.

Being of service to your staff and customers does not come naturally to everyone, but if like me, and thousands of other business owners you like doing it, then this is for you.

10. As a business owner, you need to be prepared to walk a lonely road.

This is not something people consider, but running a new business where you have to make difficult decisions can be hard on a person. Often things will be happening that you have no experience or knowledge of how to deal with. Realising that your business is not performing as it should, and that you might run out of cash and the business fails, is a very lonely place to be.

Even with the support of a great franchisor, many times the buck stops with you, and that can be hard to handle mentally.

My experience in franchise businesses would suggest that the biggest risk factor for a new franchisee is not the franchise itself, but themselves. You are the most important element that makes the franchise business successful. In Camile, we give every new franchisee a specialised toolkit (business system, brand, marketing strategies etc.) However, it’s up to the franchisee whether they use this toolkit well, or at all.

Before making the decision to invest in a hands-on franchise, have an honest conversation with yourself about your strengths and weaknesses, and your capacity to be your own boss. If you have any questions, you know where to find me. 

Good luck and stay safe.

Brody

 

Want to learn more about Camile Thai? 

Follow us on LinkedIn

Camile Thai Picture Conor McCabe Photography.


When to Franchise vs. Go It Alone by Brody Sweeney

I’m Brody Sweeney, the founder of Camile Thai Kitchen, an award winning home delivery franchise.  This blog is not about my business, but rather some advice for if you’re thinking about franchising, or indeed already involved in it – and want to learn more.

Join a Franchise, or Go It Alone?

When you’re thinking about starting your own business, many people will advise against investing in a franchise. “You have to pay huge fees” is a common reason I’ve heard, “you won’t be able to make your own decisions,” “you’ll be a small cog in a big wheel.” While these sentiments carry some truth, going the route of full independence (and risk!) comes with its own set of difficulties too.  Which path you choose to take depends on many factors, such as personal vision, personality type and entrepreneurial goals. However, a good franchise can be a much better idea than doing your own thing for a large number of people – keep reading to find out why.

1. It will be easier to raise finance for a franchise.

Banks love lending to franchises, because they are inherently less risky than lending to an unknown start-up. You’ll be able to borrow more (which isn’t necessarily a good thing – the more you borrow, the more you have to pay back!), but regardless, a franchise agreement will likely provide more favourable terms than you would be offered on your own.

2. You don’t have to reinvent the wheel.

Starting a new business on your own is hard. Very hard. Figuring out how it works, sorting out your operating systems, coming up with ideas as to how to market the business, and figuring out what products to sell  for takes time, and generally costs money as you try out one strategy over another. For some very few entrepreneurs it seems to come easy, but for 99% of us mortals it’s incredibly difficult to get a business going.

In a franchise, your franchisor and other franchisees have figured out the nuts and bolts of the business, and you can benefit from that knowledge and their experience of operating in your niche area. It means that instead of re-inventing the wheel, you are able to concentrate on building your business locally, hiring and training great talent, and being an outstanding ambassador for the brand.

3. You may be able to attract better quality employees.

If I have learnt one thing from my years of experience in business, and specifically in franchising, is that the quality of your team reflects the quality of your business. I spend much more of my time in Camile on hiring and interviewing, then supporting and mentoring our team, than I did in any of my previous businesses.

And it stands to reason that people with many options will more likely go with an established brand (which will look good on their CV) than an unknown start-up. We work extremely hard in our business to create a great environment for our employees to thrive in, one in which they feel a special part of and which they are proud to talk to their friends and parents about.

4. It’s less risky. Period.

For 90%+ of small business owners, starting any new business is fraught with risk. Lots of good business ideas are just that – ideas – and translating ideas into successful businesses is not easy. Mistakes can actually bury you, or you can run out of cash before you get to viability.

Good franchises are the complete opposite. 90%+ of them will be successful. And here’s why. If your risk of failure is 90% or 80% or whatever it is on your own, it’s because you don’t fully understand at the start how the business will work. Your franchisor knows about site selection – lets say that reduces your risk by 10%. And your franchisor won’t let you open if you don’t have enough money – lets reduce the risk by 10% for that too. They know what range of products to sell and for what price – let’s take 5% risk reduction for that. All these things the franchisor knows or does chip away at the risk, to bring it down to a relatively low level. There is always risk, but it would be top of my list if I was investing my life savings – or worse, someone else’s – to reduce that risk right down.

5. You will be trained how to run a franchise.

Have you ever visited a new business, or indeed an existing business, where it was clear they hadn’t a clue how to run it? A chaotic new business opening means dissatisfied customers, and staff who cannot wait to go work somewhere else.

Having a good idea what to do, and as importantly what not to do – knowing what you should focus on at the beginning, and what can’t wait for later, are vital elements in getting your new business off the ground successfully. A new franchisee training course is essentially a start-your-own business course, focused on your exact business.

Being properly trained from the off saves time, money and means you’re more likely to hang on to your customers and staff.

6. You will avoid expensive mistakes (mostly!)

My experience of starting multiple businesses as a franchisor was that I made every mistake in the book (the smart thing was tending not to repeat them 😊). Some of the mistakes nearly buried me, and it took much longer to get to profit than it could have done. When a new franchisee joins our system, they have the benefit of the learnings from these mistakes, and so should be able to avoid repeating them.

7. You are part of a bigger community / team.

Starting a new business can be a pretty lonely experience. There’s not necessarily anyone that you can turn to for advice and guidance, and you’re often faced with difficult problems without obvious solutions. In franchising you’re in business for yourself, but not by yourself. Getting help with problems from your franchisor, but more importantly from your peers – other franchisees – can be more practical and satisfying than ploughing your own furrow. Being part of something big, the camaraderie, the feeling of belonging can all make the experience of running your own business more satisfying.

8. You will do more business and be more profitable.

Franchised outlets tend to do more sales, and make more profits than independents, and that’s despite having to pay the franchisor royalty and marketing fees. Why is that?

Your franchisor will have fine tuned their business system. Gotten out of areas that aren’t a good brand fit, or that don’t make money. Figured out efficient ways of producing your goods or services, how to hire and train staff, and invested in the right things to make your business sign. It has the substantial resources of many franchisees contributing money into the system, to allow it to hire the right people and test new ideas. It’s very hard for an independent start-up to compete against that.

9. Your franchisor’s brand means your business will get off the ground quicker.

Name recognition can be a huge factor in helping get a new brand off the ground. Customers like shopping with the familiar, and if they have heard about your business, and especially if they have heard good things, it can really help in those critical early days.

10. It will be easier to sell on later down the line.

Successful franchisees that are part of a successful brand, will find it easier to sell their businesses, and for a higher price than independent businesses. That’s because these types of business are more attractive to potential purchasers, than most independent stand-alone businesses. There is an old Irish adage about business “the day you buy is the day you sell”, in other words on the day you buy your business, understand how easy or not it will be to sell it, when you eventually want to.

Smart investors get that.

Lots of people can and do set up independent businesses on their own, and good luck to them. 

For many others of us, we realise our limitations. We have the energy, the enthusiasm and the smarts to do our own thing, but prefer to do it with an experienced guiding hand, where our risk can be substantially reduced. If you’re one of them, then franchising has to be on your menu of options.

Good luck and stay safe,

Brody

 

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Camile Thai Picture Conor McCabe Photography.