5 signs you can bank on your franchisor

By Sarah Stowe | 20 Sep 2017 View comments

Inside Franchise Business: trust is essential in a franchise relationshipDo you trust your franchisor? Trust is fundamental in a franchise relationship, so what can franchisors do to gain the confidence of franchise buyers?

We asked multi-award winning Boost Juice franchisees and Inside Franchise Business magazine’s March/April 2017 cover stars, Anthony Stahl and Daniel Mesiti, to share a franchisee perspective.

1. Ensure profitability for franchisee operations

Franchisees need to be profitable. They need to get a return on their investment, and to be able to invest back into the business for refurbishments or to purchase second or third franchises.

Demonstrating this to potential purchasers is very important, especially in a transparent and honest fashion.

We recently looked at the barber business Tommy Guns and they were very forthcoming with data and modelling used to project cashflows and profitability over the short and medium term. This is imperative information and the first thing the bank asks for if you seek funding.

2. Happy franchisees

Obviously meeting other franchisees is critical. Their opinion of the brand and business will carry considerable weight. Meeting a few different franchisees is probably important as there are always people that will complain no matter what and others that always see the bright side.

3. Showcase strong marketing and branding

This is a major reason you are paying royalties. A purchaser needs to believe in the brand first and foremost and that it will grow into the future. We think this attracts people in the very beginning. It certainly did at Boost – people really loved the brand and what it stood for.

One of our biggest concerns is protecting the brand and believing in the direction that is being taken by head office.

4. Ongoing support and training

The other major reason you join a franchise. Particularly for new franchisees that haven’t been in business before, I think this is critical. Old dogs like us may be a little more forgiving but for many this is the first venture and support is probably near the top of the list for a variety of reasons. The induction and quality of support provided in the first few months make a huge impact in the satisfaction of the franchisee in the short to medium term.

5. A solid network of stores in a variety of locations

This to us proves the viability of the model. Many franchisors build the brand in A grade locations without testing the model in strip sites or B grade sites for example. It depends on where they are trying to open more stores so it pays to check this before taking the leap.