Sometimes I get asked about helping a business to franchise and I think, hmmmm, it’s never gonna work.
I usually think this for one or more of the following reasons:
- It’s too complicated
- The owner thinks it’s an easy route to expansion
- The brand isn’t right
- There’s not enough money
But I’ve recently been asked to help franchise a business that, I think, ticks all the right boxes (if only we could run it up the flagpole and push the envelope a bit).
The product has been franchised before so there’s a market for it and the industry is pretty big, whether in terms of franchised businesses or local operators.
The business I’m talking about has a successful pilot and there’s a very simple process sitting at the heart of it which is a bit different from anything else I’ve seen in this industry. It’s easy to get your head round, low cost to enter, scalable, with a good brand.
Of course, things aren’t perfect… at least not quite.
Money is a bit tight and there’s only one person running the business and they aren’t quite ready to make the leap to become a franchisor… they still see franchising as an adjunct to their business; but they’re coming round.
All in all, I’ve been impressed with the level of detail, the integrity of the pilot operation, the simplicity of the processes and so on.
I have one niggling worry, though.
The owner of the franchise is beginning to see pound signs flashing before their eyes.
They can see the brand being extended into other areas; areas they have not themselves tested. They can see extra income as they charge franchisees for the bolt ons and extra royalty from the additional sales franchisees will make.
In short, the project is facing disaster.
Franchisees won’t pay the extra money because there is uncertainty about the systems and processes for the bolt ons. If they do pay the extra (which they won’t) they will sell less, not more, because they won’t know what to concentrate on and will do nothing well and everything badly.
I think I’ve persuaded the franchisor to adopt the KISS principle. (That’s Keep It Short and Simple or Keep It Simple, Stupid) depending on which book you read.