Francorp - The Franchising Leader in the Philippines
Francorp - The Franchising Leader in the Philippines

Franchise Hotline : (+632) 638.3149 to 50

Speed of Expansion

What Is Urgent and What Is Important.

Due to AEC’s inception, borders are opening for travel and business. With a population of more than 600 million and a robust economy, expansion opportunities abound for brands and businesses.

What is URGENT.

An entrepreneur states: “cease the opportunity as it presents itself”.  If you’re establishing your business, this mindset is correct because you must build your brand, and you must expand your store’s network to gain market share.

Speed of expansion is the main priority, and it’s vital to secure viable locations. Increasing store presence and brand awareness arecrucial to a startup business, but there are always tradeoffs.

The brand will gain market share if it executes the brand’s promise.The key is to consistently and regularly deliver a product/service on all locations.

What is IMPORTANT.

When you start franchising your business, you must consider a new set of responsibilities. Businesses rush into franchising without consideringthe financial, operational and legal implications to their business including how these will affect the franchisee.

Getting your numbers right

Like any business endeavor, the franchisee’s three questions are:

  1. How much is the Franchise Fee?
  2. How much is the investment package?
  3. What’s the ROI?

A key requirement in franchising is to ensure that both the franchisor and the franchisee is PROFITABLE. This will fundamentally determine the success of the franchise organization.

Developing anin-depth franchise business plan ensures that your numbers are right. This involves planning and strategizing the speed and extent of expansion, the applicable business structure, and determining where your Revenue streams will come from.

Getting your house order

Clear cut operational parameters should be developed, documented, communicated (thru training), executed, tested, evaluated, adjusted (if, need be), and audited regularly. In short, “winging it” will not work.

Whether you grow your brand organically (company owned stores) or thru other means of expansion, crafting and implementing an operating system will always be a necessitybecause your customer will expect consistency on all locations.If you go to any McDonald’s store in the world (except India) and order a regular hamburger, you will get the samesandwich every time.

Dot the I’s and crossing the t’s

If your financials are right and your operations systems are in place, then the next step is to focus on your Franchise Agreement.

It is essential that your franchise agreement clearly stipulate the following:

  • Brand execution and protection
  • Responsibilities of both Franchisor and Franchisee
  • Fees and required purchases
  • Territorial restrictions
  • Exit clauses

Having the best crafted franchise agreement, operating system and franchise business does not guarantee instant success. Franchisor must provide continuing value, manage expectations, and provide an open communication line.

The most efficient franchise is the one which is built on mutually beneficial relationship, and it achieves not only the goals of the franchisor to expand its business but also the franchisee’s goal of profitably operating the franchisor’s brand.