By Peter Farrell
10/09/2021
Before you start… If you own and operate a food concept that you’d like to expand, but don’t have the means or budget to do so, franchising could be an ideal option. A franchise is a business that’s licensed from the owner – including the branding, knowledge and products – in return for a fee. The model offers business owners and franchisees less risk and quicker gains, and consequently the franchise sector has grown during the Covid-19 pandemic.
Before you embark on a franchising journey, make sure you have strong foundations for your food business. Potential partners will be looking for a developed brand with a dedicated following, and a scalable model that has room to grow.
The franchising process can cost around £15 to £25k and take 6-12 months before you get your first franchisee signed up. The average success rate is 1 franchisee for every 100 enquiries. Our top tip before you start is to make sure that you have enough time and/or hands on deck to devote to franchising, without compromising your original business.
Franchising steps
1. Refine your foundations. Make sure your house is in order before you start the process of franchising your business. Are you completely happy with your branding? Does every dish on the menu fit with the concept? Are you able to showcase a strong social media presence? In the same way you would prepare before seeking investment, you should feel confident in your business and know the answers to the potential questions a franchisee could ask.
2. Develop franchise models. Put together appropriate models and systems to share with potential franchise partners, including financial models, operational manuals, a sales prospectus and an FIM (Franchise Information Memorandum). Provide as much information as you can in an on-brand, easy-to-digest format, making sure to include operating costs, the fees you would expect and the amount of support available to the franchisee.
3. Advertise. Once you’re ready to let the world know that your concept is available to franchise, organise your digital presence. Make sure to add a page to your website that social media posts and paid advertising can link back to, with contact details and further information. In addition to social media platforms, you can also place adverts in industry and trade press, and research business forums and clubs where potential franchise partners may already be located. When it comes to running paid advertising, don’t allow preconceptions about target locations to get in the way. Remember, you are appealing to potential franchise partners, not potential customers. The right franchisee may live miles away, but still have contacts in an ideal location for your concept.
4. Find a prospective partner. Filter any franchise enquiries that come through by looking at an individual or company’s background and visiting some of their other franchise locations. Face-to-face meetings are always recommended – personal fit is just as important as business credentials.
5. Find a prospective site. Once you’ve found a franchise partner you’re happy with, both parties will sign a letter of intent and the franchisee will pay a deposit to secure their rights to your food concept. You can then go on to find a site – make sure to agree with your franchisee beforehand how involved you would like to be in this process in advance – and put together a Head of Terms document.
6. Launch your franchise. Now for the fun part. Once a site is secured you can sign a franchise agreement and move forward with signing a lease for your first franchise location. To ensure a smooth and successful launch, you will need to provide comprehensive support and training to your franchisee. Use this time to educate the team on your concept and put controls in place that will help maintain consistency.
Like any relationship, each franchise partnership you enter will be unique, with each partner requiring different things. Food Motion can help you navigate the franchising process, from building comprehensive PR and marketing packages, to drawing up the right terms for your franchise business.