How to franchise a business in Ireland
Franchising your business is like setting up a new business. You'll need a proper plan, proper management, and proper funding.
We’re assuming here that you have a business that’s suitable for franchising - not all businesses are. You need to have a business that has been operating successfully before you start to consider franchising it.
If you are looking at how to franchise your business in Ireland, ask yourself these questions:
Have you run a successful business for at least one year? Have you proven your concept? Will it survive in the long term? Is it profitable? Can you produce audited accounts? Do you operate in a niche market or offer something different in an established field? Can your business be replicated and easily taught? Can you offer leadership, strong management, motivation and support? And can you offer a franchise at a cost that is good value for money and can make a decent return on investment in the short to medium term and a good living for its owner?
If you can answer yes to most of these questions you may have a business that can be franchised.
There are two essentials - a Franchise Agreement which sets out the term of the contract and the obligations of both Franchisor and Franchisee, and an Operations Manual which gives a detailed description of your system and how to operate it. A solicitor can put the first document together but only you will know what needs to go into the Operations Manual.
As with any new business, you will need adequate working capital. You cannot franchise on a shoestring. The best advice is: do it properly, or not at all. Just how much money you'll need depends on how you propose to go about it.
Apart from paying for professional advice as to the most cost-effective way of developing your franchise, you'll need to pay for advertising to attract prospects, collaterals such as brochures and video presentations, and general expenses, including travel, hire of rooms, entertainment, etc.
When the first franchisees come on board you will need a Franchise Support Manager to deal with them, someone with leadership qualities who knows your business and is a good communicator. He or she will be the day-to-day link between the franchisees and the company. If this person is appointed from within, you may need to hire a replacement to do the work he or she was previously doing.
Remember, you need to be in franchising for the long haul. So prepare for it. Franchising is not easy, and it’s not cheap. Building your new business takes time and patience.
For most people, buying a franchise means a career change and an investment of their life savings. They don't make that decision on impulse. They research the opportunity very carefully and put you, the franchisor, through the hoops to make sure they are making the right decision.
The courting period can take several months, and it could take several years before your network is well established and your investment begins to pay off. But it can be well worth the effort.
When you sell a franchise you are expanding your brand (using other people’s money) and creating an in come stream (from royalties or management fees) for the foreseeable future.
Are you ready to franchise your business?
Businesses that are suitable for franchising should be able to answer “yes” to most of these questions:
- Have you run a successful business for at least one year?
- Is it profitable?
- Can you produce audited accounts?
- Have you proven your concept? Will it survive in the long term?
- Do you operate in a niche market or offer something different in an established field?
- Can your business be replicated and easily taught?
- Can you offer a business that is interesting and one the owner would be proud to own?
- Can you demonstrate a commitment to long term success?
- Can you offer leadership, strong management, motivation and support?
- Can you offer a franchise at a cost that is good value for money and can provide a decent return on investment in the short to medium term and a good living for its owner?
- Have you got the money to fund your franchising and have you the patience to see it through, realising that franchising is a slow process and it could take several years to make it a success?
Finally, ask yourself this question: if you were looking to buy a franchise yourself, would you be interested in this one? If the answer is yes, you are probably ready to franchise your business.
By Tony Fitzpatrick, Managing Partner. franchiseyourbusiness.ie. Email Tony on email@example.com