The 7 Foundations that Build Trust in a Franchise Network

1.    The Foundation of Proven Business Systems

If the business systems aren’t proven, then it’s not a valid franchise.

The trend of people selling “Unproven Ideas” as franchises is not new.

But, we live in the era of social media.

There is no reason that buyers can’t investigate for themselves, the success or failure of franchisees in any network.

Franchisors should be encouraging potential business owners to contact current and ex-franchisees directly through social media or face to face .

 It the business system doesn't have a proven track record of success, with documented manuals and a professional support network, it's not a real franchise.

It's a just a random idea that a salesperson is trying to get you to give them YOUR money for?

Don't pay franchise fees for an idea. (No matter how good it sounds)

2.    ‘Honesty and a Fair Deal

Franchisors tell it like it really is.

Education should start before franchisees actually sign up and pay any money.

If a potential franchisee understands the true answers to these 3 questions:

• What actually is the system?
• What it will takes to succeed?
• Why do franchisees fail?

They will have the knowledge to make an informed decision either way.

NO B.S!

3.    No Vilification of Franchisees

Franchisors systematically blaming franchisees for all failed businesses is a major red flag.

There is something clearly wrong in a franchise systems that is playing a "blame game". 

The 2 Questions that need to be asked are:

Why did the franchisor recruit these “Bad Guy” franchisees?

Why didn’t they fix the problem BEFORE the franchisee crashed and burned?

Franchisors and Master Franchisors using social media, marketing and lawyers to bully, bury or blame the failed franchisees is common in many franchise networks.

4. Proactive Business Coaching and Support.

Systems without a professional level of business coaching and franchisee support will fail.

Business owners need positive, proactive, business coaching to guarantee success.

People need help when things go wrong.

Professional help with the possible mental health issues that can arise when franchisees are struggling.

The help of a mediator to negotiate a safe as possible exit out of the business. 

Most franchisors spend their resources covering their own butts before ever considering the welfare of their people.

5.    Reduce the franchisees’ risks.

Franchisors with overinflated initial franchise fees create huge pressure on new businesses owners.

Many have no real original intellectual property…

Franchise Systems with Master Franchisors are manufacturing an overinflated valve in franchise fees to encourage the sale of master franchisors.

All franchise agreement should have a “parachute clause” that empowers franchisee to a safe escape the agreement if things go south.

Franchisors who are systematically making money, while franchisee's lose everything is unethical and immoral.

6.    Value for money for the Franchisees

Simply, the franchise business must be MORE profitable than an independent business in the same industry.

Example, In the service industry this is no longer the case.

The independent business owner can now get professional support, training and market online.

The standards are higher standards than that supplied by most Master Franchisors and for a fraction of the cost of the franchise fees.

Franchisors have to make the franchise offer great value for money.

That means cheaper, faster ,better and more successful than it was in the past.

7.Pragmatic long term leadership.

Franchisors who pragmatically deal with the changes in the franchising sector can survive in the long term. 

The unseen challenge to franchising is the independent business owner’s revolution. 

We have more family small businesses than any time in history, but we have a declining franchise sector. 

80% of franchisors will not survive the next decade, they will go the way of the VCR, Fax Machine or CDs. 

For Franchisors it is time to evolve or die.

If you are considering buying a franchise?

Take your time and do your homework?

There are plenty of options in the marketplace, it is a buyers market across the whole franchising sector.

If your Franchisor doesn't tick all the above boxes, DON'T give them your money.

If you start your business as a franchisee or as an independent operator the success or failure does always end up in your own hands.

Be brave, but be smart in your decision then make sure you put in 100%.

Small business is the best game in town.

Robert James

Robert James, James & Co Small Business Strategists.

Best Selling Author of "The Ultimate Guide to an Extraordinary Service Business"and "Balance; How to Make Your Business and Family Life Work Together"