Franchise Building 101: Everything You Need to Know as a Franchisor

McDonald's, Outback, KFC, and the Dollar General. What do they all have in common?

They are all franchises. And by learning how to build a franchise, your business could become one too.

Franchises are a viable investment strategy for people all over the world. They represent a great opportunity to run a business; they can be a great place to invest retirement money, and their "plug n play" nature is attractive to investors from all walks of life.

But what goes into building a franchise? What goes on behind the scenes? How do you get people to knock down your door with checks to open up an ABC Widget Shop of their own?

Keep reading and we'll tell you all about how to build a franchise out of your small business.

Start With The End in Mind

Life, and franchising your business, is like a road trip. How are you going to know which direction to drive off in if you don't have a map? 

How are you going to franchise your business if you don't know what you want it to look like in the end? Sounds simple enough, doesn't it? Well, it will take some thought and planning on your part to iron out all the details of ABC Widget Shop Inc.

You have to remember: Your franchise opportunity has to appeal to the masses. The school mom who wants to invest her hard-earned retirement money needs to be able to operate her widget shop with just as much ease as the franchisee with 20 years' experience in your industry.

Here are some things to think about:

• What will your unified store layout be
• What are your standard hours of operation
• What are your standard operating procedures
• How large of a staff will be on-hand at all times
• What are the staff roles that need to be filled each shift
• How will your franchisees get leads
• What is the sales process

Chances are you already have a good handle on most of these things. If that weren't the case you probably wouldn't even be thinking about franchising your business.

But when you're focusing on how to build a franchise, there is no room for error. Leave no stone left unturned. Taking the time upfront will make your journey a heck of a lot easier, and help you to hit one of the key points of franchising your business: consistency.

Consistency

What makes McDonald's or Chick-fil-A great? Is it their sandwiches? Is it their fries?

No and no. What makes these franchise giants great is the fact that wherever you are in the world, you'll never be disappointed by their food. A McDouble is still a McDouble whether you buy it in Paris, TX or Paris, France.

The name may be a little different. But the product will be the same.

How do they do it? Consistency. And that's how consistent your product and processes have to be if you have any hope of franchising your business.

What's the secret to this level of consistency? It's actually genius in its simplicity.

Documentation

Every process in your business needs to be written out, move by move, and repeatable to the point that you get the same result. Every. Single. Time.

Going back to our McDonald's example, this means there's a process for where you order your buns, where you order your meat, how you order your buns, how you order your meat, when do the onions go on the burger, when does the cheese go on the burger, how much ketchup goes on the burger, How do I fold the wax paper around the burger before putting it in the bag...

We went a little long there to illustrate a point, but do you get it?

Every little thing must be documented. If you do it on a regular basis, document it. Period.

Just to hammer it home: Dave Thomas, of Wendy's, could tell the health of his entire business by the number of hamburger buns he needed to order each week. That level of consistency is a key part of how to build a franchise.

Automation

Automation is a nice byproduct of consistency.

Now that you have every step of all of your repeatable processes documented, you'll be able to see where systems, software, or tools can be used to streamline things even further.

This will apply to things like business taxes, inventory management, staff management, and HR tasks. In today's modern business world, there isn't much you can't automate. Which actually leads nicely into our next point. 

Choose what you automate. Business owners can get caught in the trap of trying to automate every little thing. Don't go down this rabbit hole. 

Automate the tasks within your business that are real "time sucks". Your goal is to get franchisees running mirror images of your business. You don't want them dealing with inefficiencies and getting burnt out.

Automate, but automate sparingly. The non-scalable, "human" elements of your business will set you apart in the long run anyway.

Now You Know How to Build A Franchise

Keep these three principles in mind and apply them to your business. They are the blueprint. If you stick to them you'll build yourself a solid foundation on which to grow.

As you grow, things will become easier to streamline and automate. You'll learn things about your business that you didn't know before, and you'll learn new methods to control the consistency of your brand and product.

Big brands, like McDonald's, have grown so big that they have control over every aspect of their business. When they first started out, they were probably buying meat, buns, and produce from a supplier. Now, they're such a big corporation that franchisees order their inventory and supplies through McDonald's.

McDonald's even has lists of approved vendors franchisees can use if they need to do construction on their store locations. Being that size helps them control every aspect of the process and maximize consistency.

Someday you will get there too.

Taking It All To Go

Congratulations! You're on your way to becoming the next Ray Kroc (founder of McDonald's). We hope you were able to get some value out of this article and leave with some tips and tricks to apply to your own business.

Remember: consistency, documentation, and automation. Take those to your business and you'll become the local expert on how to build a franchise.

Do you have more questions on this topic? Let us know in the comments. We'd love to hear your feedback.

Do visit us online to see how we can help you build your franchise.