3 must-tell signs of a supportive franchisor

By Nick Hall | 15 Jul 2019 View comments

Franchising is a system that has allowed a wealth of Australians to achieve their entrepreneurial goals, but how do you know the mark of a supportive franchisor?

The model relies on a predetermined structure for success. The franchisor’s direction, vision and guidance are critical to the ongoing performance of every individual franchisee.

Having a supportive franchisor on hand to provide assistance and information can simplify the difficult elements of business ownership. This support is one of the key reasons entrepreneurs opt to enter franchising over independent operation.

If you are considering a franchise business, it is essential you perform a detailed assessment of the franchisor’s support structures. The results can reveal a lot about the business and help you to spot any red flags moving forward.

Here, Inside Franchise Business takes a look at three of the most telling signs of a supportive franchisor.

Training

Whether your chosen business is a franchise that you frequently visit, or just one you have read extensively about, any new opportunity will present an element of the unknown.

While the onus is on you to adjust accordingly, the franchisor’s ability to provide detailed training is critical to your ongoing success.

Make sure to assess the franchisor’s training program prior to making any purchase. Be clear on your responsibilities as a franchisee, but don’t think you have to be an industry expert to run a successful franchise.

Your franchisor should be able to train you to excel in a field where you have little or no experience. After all, this is the primary benefit of entering into a franchise system in the first place.

Corina Vucic, director of FC Business Solutions said speaking with current franchisees is the best method for establishing how detailed a franchisor’s training is.

“They can tell you the strengths and weaknesses of the program and whether they thought the initial training prepared them properly for the first months of operation,” she said

“Importantly, quiz them about the quality and accessibility of initial and ongoing training and other learning resources.”

Marketing

Getting your franchise business of the ground is one challenge but getting customers through the door is another.

As a new franchisee you want to make sure that your franchisor is wisely investing in marketing either through a national marketing strategy or through extensive local area initiatives.

Most franchise models will require you to pay a marketing levy to the franchisor. Under regulations, the franchisor must disclose certain information about the funds.

According to the Australian Competition and Consumer Commission (ACCC), the franchisor must prepare an annual financial statement detailing all of the fund’s receipts and expenses.

The statement will give you important information about contributes to the fund and what the money is spent on.

Prior to signing on, ask the franchisor about the marketing spend. What mediums do they use? Is social media advertising included in the royalty/marketing fees? Be sure to establish what it is that you are paying for.

Direct communication

One of the most powerful assets for any franchisee is their field support manager (FSM). A supportive franchisor will not only offer access to an FSM, but also a direct line of communication.

In the early stages of operation, your FSM will be instrumental in helping you navigate the day-to-day issues of business ownership. They are equipped with a wealth of knowledge, both on the sector and model-specific.

Marty Mason, regional manager Baker’s Delight said the mark of supportive franchisor was a strong investment in support staff such as FSM.

“I have come to the conclusion that an effective working relationship comes down to both the franchisee and field manager working equally hard, as well as something I call ‘constant and deep communication’,” he said.

“I also like to encourage franchisees to ask their field managers as many questions as possible. Throughout my career, I have noticed this to be the most under-utilised support method.”

The signs of a supportive franchisor

Whatever you desired industry, a franchise opportunity will specific challenges. The most important factor in your franchise success is support.

Having a support franchisor to guide you in your journey is critical to not only establishing a successful business, but maintaining it.

Always remember to assess a prospective franchisor’s support structures prior to making any purchase.