Is franchising right for your business?

You have been thinking about it for a while.

Whether franchising is the right next step for your business. Whether it is as straightforward as it looks from the outside. Whether you are genuinely ready, orr whether you are more attracted to the idea than the reality.

This episode gives you the honest answer.

In the founding episode of The Human in Franchising, Belinda Bradley and Julie Taylor introduce the Five Foundations framework, the diagnostic used to assess whether a business is genuinely franchise-ready. Not in marketing language. In operational reality.

Most businesses that want to franchise are strong on two or three foundations. The discovery of the others is where the real work begins. This episode names them, explains what each one actually requires, and identifies which one most business owners most confidently underestimate.

In this episode:

•  What franchise-ready actually means and why most businesses are not there yet
• The Five Foundations: Commercial proof, Operational Replicability, Leadership Readiness, Strategic Commitment and Personal Fit.
• Why "can we franchise this?" and "should we franchise this?" are not the same question
• What the Franchise Fit Matrix reveals at the franchisor level
• The single most useful thing a business owner can do this week.

The Franchise Readiness Assessment maps where your business stands across all five foundations. Free. Download at: Franchise Readiness Assessment

AI will give you franchising information. It will not read the brand, the numbers, or the person. That is the product of decades inside the sector, and a methodology built around the humans franchising depends on.

Find us:

LinkedIn - Belinda Bradley

LinkedIn - Julie Taylor

LinkedIn - Runo Franchising

Free resources:

Franchise Readiness Assessment

Before you Buy a Franchise Guide

Transcript

SPEAKER_01 0:28

The question we get asked more than any other is can my business be franchised? And the honest answer, most of the time, is probably. However, whether you or your business are ready to franchise is a whole different question.

SPEAKER_00 0:45

That's so true, Julie. We get asked that all the time. Most business owners we speak to are strong on two or three of what we consider to be the five foundations required to create a sustainable franchise network. They are commercial proof, operational replicability, leadership readiness, strategic commitment, and personal fit.

SPEAKER_01 1:07

And as a business owner, understanding which of those is your strong point is really important because if you don't get that right and you are you need to know which of these five things you are working with, that can cost you a small fortune if you get it wrong. What the franchise industry presents as a question is can my business be franchised? But the real question is actually, are you in your business ready for what franchising requires?

SPEAKER_00 1:40

So, so important. Let's start with our first foundation. And it's certainly the first of the five foundations we use when we work with any client wanting to franchise their business. We found it works over and over across any sector, across any kind of any kind of business, whether it's a premises-based business or whether it's a territory-based business, the same criteria are what we apply and we adapt per model. So the first foundation is commercial proof. And whether there is repeatable evidence that the business is actually profitable, that it has been running for a period of time, that that has been tested, and that we've got evidence that the profits are there. So we understand what affordability looks like in that particular model.

SPEAKER_01 2:26

Absolutely. So yeah, I I completely get that bond. What if you've got a business that is really a great business concept, and you've got people saying to you, I want to, I want you to let me have one of your franchises. But they're in a position where it's not franchised yet, but they're eager to everybody wants it, so let's get it out there. What do you think happens there?

SPEAKER_00 2:55

Well, we get we do get that quite often, and it takes me back to a particular situation where the nature of the business model, it was a food uh sector business, um, but it was a very seasonal model. So it really relied on various seasons for for for very specific reasons. Um it had been it had been tested over one season, which did not actually happen to have been a whole year. So where we say you need a year or two's worth of financial figures to make sure this is well established, in this particular case, in that with the nature of the model having been examined, we found that there was enough evidence to substantiate um a call to actually franchise the business. Um, that went hand in hand with the fact that the franchisor was actually ready as well. So he was at a point where he could step into the identity of franchisor. He was ready to lead a group of independent business owners. He um understood what the strategic investment was going to be in terms of getting it ready. And he did have a steady stream of people saying, please, you know, there was a huge call for this business in other territories. And it was fairly simple to replicate. We also um found that if he hadn't done that then, there was going to be a stream of copycats that came in, copied what he was doing in a fashion, not everything. Obviously, his recipes and everything were unique to him, but the concept itself was, you know, he would he would have lost his first user advantage. And so, all things considered, we took a decision to franchise that business. It's still a successful business today, and so it was the right decision. And so, really, what that's saying is that there are exceptions, but you really need to have considered thoughts applied to that so that you can make sure that you aren't just jumping in far too soon and ahead of making 100% certain that there are or there is enough financial evidence to prove profitability over a period of time.

SPEAKER_01 4:52

Absolutely. So, what about when you look to replicate the business from an operational perspective?

SPEAKER_00 5:00

So, the operational side of the business, operational replicability, um, we really look at there to make sure that the business doesn't depend only on the brilliance of the franchise or so it mustn't come down to just what's all in his head. That must be transferable into methods, into policies, into procedures, into systems that can run without the operator involved and that can be then scaled across several locations, of course. Um, so yeah, operational replicability is something that we look at. Often we find at that point when we get to it in the in the in the process of franchising the business, we may have to do it, make a little few little tweaks. Um, very often systems aren't quite there. You know, when you're running a franchise network, that's very different to running a single operation. And so what you find is that sometimes you need additional software that's going to handle uh a much greater level of communication, for example, with everything in one space, uh, certainly benchmarking, certainly um being able to manage performance over a number of different outlets and having benchmark figures handy at your fingertips, that kind of systems um intervention is often required and not there in a pilot operation because it wouldn't need to be there. So at that point, we we we often um we sort of take a pause sometimes, go and find the most appropriate system that's going to work for that particular model and and then ensure that that operational side has been taken care of before we replicate.

SPEAKER_01 6:38

Yeah, absolutely. So the the unfranchisable bit of the business is often the fact that the franchise all themselves are unfranchisable, and that kind of looks at the the real human part of franchising is where franchise energy energetics comes in, of course. Yes. Um methodology really shines in that particular aspect. So what do you think about how that can, you know, how do you take somebody who's okay leading their business, but then you want to take them into leading a much bigger scaled-up version of their business? Yeah. How does that work?

SPEAKER_00 7:23

Well, you know, that's how life's work, really, isn't it? You know, franchise energetics was born because we'd seen too many people doing things that they weren't prepared for and that they hadn't considered. And so, you know, hence, hence the whole franchise energetics movement and certainly the methodology we use, you know, when in in every part of our business, not just this part. Um, but leadership readiness is um a really important part, and it's something that we we work very closely with franchise alls on, shifting them from just a single operator practitioner, stepping into the identity of franchise all, what that's going to require, how do they have to show up each day, each month, each year? It's a long, long-term commitment. This is not something that is short term. And so there's a lot that needs to be considered. Um, just from just think about it from a PR perspective, you know, um, and and they become the voice of the franchise and what have you. And so very often they're not prepared for that. You know, if they're afraid of the limelight, so to speak, that's um often something that's got to be worked on. If there are any limiting beliefs there, you know, that prevent them from actually taking charge of the situation if they feel that they're not, you know, can't do it or they're not worthy of it, or uh, you know, there's a there's a whole lot around franchisor identity that we work with uh to ensure that they are well equipped to have dealt with that and be able to step into the role of franchisor. And certainly our approach with our clients has been to guide um and mentor them really along the way. So we generally don't leave their sides, you know, we we're there for the long term. It's not just a contracted product product and then off we go. Um, and it's one of the things that ensures that they always have somebody to come back to to ask questions to, you know, for that guidance and reassurance sometimes.

SPEAKER_01 9:09

But sometimes they they don't even know that they have limiting beliefs or that they they have any of those possibles that we've just spoken about. So it's really important that people come to franchising understanding how the business works, how they work, where where's the the gap that we have to fill. Absolutely.

SPEAKER_00 9:31

It's certainly our pointed uniqueness, isn't it? I mean, uh again, we go back to our franchise energetics methodology and what we bring to the party as far as that's concerned, because it's not just the procedures and the transactions that are involved in creating a franchise, the human is key and critical to the whole process, and so we've seen that over decades across so many or different countries, certainly different business sectors. Um, there's always a human involved somewhere, and that you know it's worth making sure that that human is well prepared to take on the role.

SPEAKER_01 10:05

Yeah, absolutely. So let's move on now to the costs involved. Yeah. If somebody wants to franchise their business, what are in reality, what are their costs? Because sometimes we see, you know, oh franchise your business for a thousand pounds and and you've got everything there that you need. Well, I struggle with that because I think, you know, if if it costs you what, three thousand pounds nowadays for a franchise agreement, you need to spend time and energy and money and on getting your ops manual ready. You may or may not have consultancy costs. Um what would you say to somebody who's really trying to work out what the real cost is to doing this?

SPEAKER_00 10:56

Well, you know, Julie, there's a lot of myth out there. You know, we we look at this as our fourth foundation, our strategic commitment foundation, uh, where we where we delve into what it's going to cost to set this business up, firstly. And and dispel the myth that that franchising is, you know, using other people's money to expand your business. That happens down the line. Uh, but certainly, and certainly for the development of those stores. But before you can get to taking on a franchisee, you have to have invested in your strategic infrastructure. So, as you've mentioned, there are operations manuals, there are systems, there is your strategic advisory panel that you have around you. Um, so we always sort of say you've got to get the foundations right. If you get the foundations right in any business, you can build it into a huge empire. But get the foundations wrong and you are shaky from the start, you run the risk of the whole thing collapsing. So that's sort of I haven't considered anything. I've just done a copy and paste job. I asked ChatGPT for a few pointers, um, and I think I know what to do. I copy and paste it somebody else's franchise agreement, and I'm, you know, it hasn't been considered, um, and I'm just going to get going. Well, you and I both know how that fails and how many clients we've taken on, because there was a big mess created and we had to fix it. So the best advice I can give anybody at this stage is take considered advice. Um, it's a big long-term commitment that you're taking on, and it's a it's a it requires, um, it deserves some strategic analysis, really some considered thought into what it's really going to take to franchise. So that long-term strategic commitment and the costs involved in getting it to the point where you can sell the first franchise is often underestimated and it's not necessarily conveyed in some of these do-it-yourself operations, you know, put put things together quickly.

SPEAKER_01 12:57

If I go back to my estate agency days, yeah, and just I just thought then of a really sort of what I think might be a good analogy, but yeah, you see what you think. So if you build a house, yeah, you've got to dig down, you've got to build the foundations, you've got to spend time and money on something that nobody's ever gonna see to build that house firm. Then on the surface, whatever you build it with, wood, brick, w whatever, that's gonna stand firm because you've got those foundations. It's going nowhere. If you've got a franchise and you just don't have any foundations, you just build what everybody can see, before very long, that's gonna fall over.

SPEAKER_00 13:45

Is that a good analogy? It is a good analogy. And to take it one step further, you know, you're using that that specific analogy, um, you've got to begin with the end in mind. When you are building foundations for a single-story house, the foundations look very different to whether you're building a multi-story house.

SPEAKER_01 14:04

Yes.

SPEAKER_00 14:04

So in franchising, if you were just building in a local network, that your foundations might look slightly different to whether you're building a national network and certainly would look very different if you're building it for an international market. And so and the same goes for what your end game is and taking that into consideration. So are you are you eventually pitching this whole business for a buyout? Are you pitching it for long-term uh growth and expansion internationally? Because how you intend ending up affects what you do now in the foundational stage. And making key critical errors in these foundational stages, not considering all the aspects that need to be considered, can cost you dearly down the line. Really can. So um, yeah, that's a great analogy, Julie. A really good one.

SPEAKER_01 14:58

Let's talk about our final foundation. Yes. And it's often very underestimated. Yes. Comes in a little bit with the leadership one, but not entirely. This is a different looking at it from a different angle, isn't it? Yes, it is.

SPEAKER_00 15:16

Yeah, it is. So it it it would be our person the personal fit. It's the final um foundation in the RFA foundation's uh methodology. Uh and here we look very much at the character and the temperament of the franchise all and you know what their propensity is to lead teams um and to do what it's going to take in order to get the business to where it needs to go. Uh, where they're at in terms of outsourcing certain elements, because as you know, when you when you start out, you are all things to all people. You run very lean teams, and it does take a lot of dedication and commitment and time and effort. And so where are they at in their lives? Are they able to dedicate what's going to need to be dedicated to that? Have they got a good support structure around them? Um, are they good with people? Uh, you mentioned before that you know, you know, you you're not creating a whole different business where you are coaching, guiding, training people rather than just getting on with the business of the day. Uh and that often we, you know, can run you know amiss. So we have to make sure that in this final foundation that the personal fit that has been considered and that um every aspect of that is um is uh accounted for when franchising the business, basically.

SPEAKER_01 16:37

Yeah. I I think the reason I really like um um a franchise fit metrics is because it sh it shows very clearly whether a business can be franchised, but whether you are the right person to do that as well. Yeah. And I think that's really something that um I'm very keen to share that with people as we go through our sort of putting this human into franchising aspect together. What are your thoughts around how that works?

SPEAKER_00 17:15

Well, I I agree with you. I think it is. We have developed that over decades of of working in the sector over so many different business sectors.

SPEAKER_01 17:26

Yeah.

SPEAKER_00 17:26

Uh, and we've found it it's proved itself over and over and over again. Um, so yeah, absolutely, applying the the franchise fit matrix to this aspect of franchising your business is hugely valuable. Um, and it certainly highlights where there are any uh areas that need help and work and and and focus, shall we say? If you think that you are ready to franchise your business and you think your business is ready to be franchised, or perhaps you're not ready, perhaps you are undecided, you would be well advised to download the franchise readiness assessment guide. There's a link below. It's free of charge. Go through that, work through all the aspects. It certainly takes you through all the foundations we've spoken about. There's some points to reflect on, uh, some questions that you need to ask yourself. Uh, and that is a really good place to start. So if you are thinking that maybe this is something you want to consider, I would go there. I'd download the guide, work through it. If you need some help or assistance, by all means, um, book a free clarity call with us. Uh, we can work through and see what stage you're at. Um, it'll be an honest uh uh account of what we feel. Uh, not all businesses are ready, and uh, and we're not afraid to say that they're not ready and that people aren't ready. So we do have those kind of honest conversations of saying, you know, it's this is not something we would we would entertain.

SPEAKER_01 18:51

I think the uh our own sort of um personalities come into that as well. We've got a very straight talking South African, yes, we do, and we've got a Yorkshire las. Yes, both of us say what we think. Yes. So if we think somebody's business is not ready or or can't be franchised for whatever reason, we will say no. Absolutely. Equally, I have had occasions when I've spoken to people who are not ready to be a franchise or they're not franchisable. Yeah. I can think of one example in particular. I had a guy call me and he said he wanted to franchise his business. I said, all right, okay, tell me a little bit about it. And then as the conversation went along, he he didn't want to be involved in the franchising of his business. He wanted me to do it. And I said, No, no, that's not how it works. You need to understand that you've got to do all the work to get the franchise, you've got to be coached into that franchise or identity, as you as you said. Yes. And he gave me all sorts of but what if, but what if, but it was always what if you do it and then show me what you've done. I just said, no, no, no, no, no, no, no. That's not going to work. And to my knowledge, he hasn't done it. But I I wouldn't do it with him.

SPEAKER_00 20:22

So, you know, certainly those those kinds of decisions are almost unquantifiable.

SPEAKER_01 20:27

Yeah.

SPEAKER_00 20:28

As is making mistakes in these early days. And we've both had uh we've both had clients where who've come to us after having appointed the first five or even seven franchises. Um, they've appointed franchisees, they um their foundations have not been solidly um sort of stacked, they haven't considered all the aspects, their holes in the franchise agreement. Um they haven't got a proper onboarding process. The training is is next to nothing. Just come and watch me and hopefully you understand what goes on. And at that stage, you know, have realized this is a much bigger deal than they ever anticipated it would be. And you can't know that if you're just if you don't know what questions to ask when you're doing your research. Um, and those are costly, costly errors. You know, we both know of people who've had to buy back businesses, all seven of the first ones had to buy back because they had such bad foundations. And yet the business model was just bursting to come through. Great, great business model, just very badly put together because they didn't consider the whole process from the beginning.

SPEAKER_01 21:36

I think kind of going back to the human bit there as well. If you think about it, you are if if you're gonna set up your franchise business and other people are going to invest their money in you know, making this brand grow, if you like, because they're gonna be in various different towns. If you've not got it built right, you're using their money to fail. Yeah. And that's not fair.

SPEAKER_00 22:04

It's not fair, it's not ethical.

SPEAKER_01 22:06

No. It's really not. No.

SPEAKER_00 22:08

And so, yeah, a very, very good point, you know, um, in terms of understanding what the model requires. And he, you know, the essence across all franchises is to create a win-win. Franchise always have to win as much as franchisees do. And if you can't find the win-win in the model, there is no franchise model. One-sided franchise agreements, one-sided franchise models fall over every time. So it's um it's one of those things that um when you know, when you're looking at it, you've got to create that win-win and be able to establish consistency across your network. If you can't get that right, again, you you have a model that is very unstable. You've got confused marketing messages, people don't know how to deliver on those. Inconsistency in a network that hasn't been well considered also destroys networks. So it does. And destroys people and lives in the world. And that's the problem. And that's where franchise energetics came from because we've seen far too much of that. Yeah, exactly. Yeah, exactly.

SPEAKER_01 23:09

So, guys, what I would suggest you do is have a look at the franchise readiness assessment garnet because it really is a useful tool and it's free. So why not? You know, we like to make sure that we've got the human element there, but there is the practical side of it as well. And hopefully that will help.

SPEAKER_00 23:29

Remember, behind every franchise agreement, there is a human story, and when we take time to understand the human, we make better franchise decisions.

unknown 23:40

We do.

SPEAKER_01 23:41

That's so true.