Master franchising facilitates business growth and allows a franchised business to grow its customer base. It’s wise to consider whether your brand is ready for a global outlook and prepare accordingly. Also, lacking a good strategy when going global can present challenges in the future.
Franchisors must prepare adequately by adopting a strategic approach to ensure the venture is successful. Starting a master franchise might mean starting a new franchise unit in a different country or state with different laws. Consequently, it’s advisable to contact a franchise dispute attorney if you’re considering expanding your business through master franchising. So, when is a franchised business ready for master franchising?
How to Prepare for Master Franchising
Establishing a franchise is one thing but turning it into a successful brand is quite another. The same principle applies to master franchising. Research shows that franchisors who expand their businesses strategically are likely to succeed in the long term. On the other hand, a trial and error approach is an ingredient for failure. Then what’s the best way of preparing for franchising?
1. Understanding “Why”
Understanding why you should expand your franchised business through master franchising can help you make informed decisions and set your business up for long-term growth. Master franchising equates to cross-border business operations. The following are some reasons why you should consider master franchising:
- If your brand can serve a global market;
- If you want to diversify business risk and revenues;
- Reducing the impact of the current market’s economic fluctuations;
- If you want to expand a franchised business without capital.
2. Evaluating your Resources
The financial commitments of master franchises can be overwhelming if you’re not prepared. The usual challenges encountered when starting a business also apply to master franchising For instance, it can be difficult to expand your business with limited resources.
Having “enough” resources is arguably the most critical factor if you’re considering international expansion through master franchising. “Enough resources” is not only limited to money–it can include:
- A reliable and competent team–human capital;
- Ability to recruit a competent master franchisee;
- Suppliers, clients, and other crucial stakeholders.
A research-focused budget is pertinent to the expansion of the business. Either way, you’ll need enough resources to develop an international brand. Master franchising help entrepreneurs who wish to expand abroad but have financial constraints– franchise fee, payable by prospective
3. Protecting Your Brand
Your brand is the most valuable possession in the meantime–meaning that you might be ready to expand abroad if you’ve figured out how to protect your brand. Protecting the brand is a broad subject but can be broken down into two–legal protection and enforcement. Legal protection means having a person who understands the legislations of the target market to represent your interests.
You’ll likely encounter copycats if you have a good moneymaking concept– that’s why you need an expert to represent you in the target market, such as a franchise dispute attorney. The attorney can help with copyrighting issues, dispute resolution, drafting a fair franchise agreement, and others. Always remember that master franchising means allowing strangers to act on your behalf–that’s why having a competent partner is important.
4. Recruiting a Qualified Master Franchisee
Franchisors should have a preset criterion specifying the necessary skills required to be possessed by your ideal master franchisee. The criteria for selecting an appropriate candidate can vary by industry or business. However, some attributes of competent master franchisees are common across the board.
Hiring a recruitment firm based in the target country is a good way of simplifying the hiring process. However, you must ensure that the recruitment firms understand your needs and can source the right candidates. Your first franchisees will be used as the yardstick to measure the viability and practicability of your concept by future prospective investors. In other words, the performance of your first master franchisees will undoubtedly impact your prospects
Before thinking of training, systems, drafting a contract, and ongoing oversight of your brand, you should strive to recruit the right partner–a master franchisee. Preparing for master franchising can increase the chances of success when expanding globally.
5. Conformity to Standards
Research shows that most successful franchised businesses conform to certain standards or practices, such as:
- Facilitating workers’ growth and development;
- Rewarding good performance;
- Continuos self-assessment and training to spur good performance;
- Using technology to simplify business processes;
- Maintaining a good relationship with clients.
It should be easier for a franchisor to help a master franchisee incorporate the above-mentioned practices and standards into their businesses. Also, ensure the franchisee shares your vision and that their goals align with yours.
A reliable master franchisee can attract customers to the brand and increase the customer base in the target market while remaining loyal to the principles of the brand–you should ascertain this is achievable before committing yourself.
