A franchise is a family

Why franchising is the best business model for 360 success

It took me a long time to reach the realisation that franchising is the best business model.

It's taken me even longer to really put into words why I think that is:

A franchise is a family. It's pretty much the only business model where it is in everyone's interests for the entire network to do well – and where everyone benefits when it does.

Other business models might call for less initial investment. They might sound like less of a commitment.

But they give you oh so much less in return.

What is a franchise?

The classic way of looking at the franchisor-franchisee relationship is this:

It's a legal and commercial framework. On the one hand, we have the franchisor. They have the brand name, the trademarks, the proven processes and the successful business model.

On the other hand, we have the franchisee. They want to use everything that the franchisor has. They give the franchisor money to get it.

Put like that, it sounds like a very one-way street. It also sounds like a cold, straight business transaction. You want something the franchisor is selling. They want you to buy it from them.

But this fails to appreciate what a franchise is all about. It isn't a one-off transaction. Both “sides” are investing in the start of what should be a long and successful business relationship.

The franchise as a family

The whole franchise network rises or falls together. When one part does badly, everyone suffers. But when everyone works hard and succeeds, everyone reaps the benefits.

The franchisor's processes and the activities they undertake on their franchisees' behalf (for example, Fantastic Services does all of the marketing and handles customer service for our franchisees) should be continuously improving and growing and making life easier for their franchisees.

Each franchisee should be able to get down to business every day knowing they are operating in the best way possible and in the expectation of getting the support they need whenever they need it.

The combination results in not only profit for individual franchisees, but benefits for the network as a whole. The more the network grows, the more successful, high-quality services it delivers. The more clients know they can rely on it for quality, the more success builds on success.

But it doesn't work if the franchisor “parent” doesn't do its share of the work.

Building family ties

If you are looking for a franchise to join, be sure to investigate the support you are going to be getting. Specifically, in terms of day-to-day operations, marketing and training.

Of course, any franchise network will want to sell more franchise units. But you want to be sure that your franchisor's new franchise sales efforts don't detract from the support it gives to its existing franchisees.

For example, at Fantastic Services, the teams of people we have whose sole job it is to find clients for our franchisees, filling their schedules for them – and take care of franchisee customer support so they don't have to – do not take time out to sell franchises.

They are there every day to give our franchisees the support they need no matter what comes up. If our franchisees have an issue, they know they can contact our central team and get either advice or action depending on what's gone wrong.

That's something that no other business type can offer an entrepreneur.

An unhappy family is easy to spot

The most common objection to the franchise setup is some imagined scheme whereby the franchisor sits back and does nothing while the franchisees do all the hard work.

The obvious response to this is that no business would remain successful for long if they become known for this sort of practice.

There may well be franchisors out there sitting at the head of their rapidly declining network, trying to extract money from their franchisees as their business fails. But, in my experience, they're rare – and also pretty easy to spot.

After all, if you're planning on becoming a franchisee, all you need to do is ask to see the franchise disclosure document. There you will see if there is a fast turnover of unit owners, if the franchisor is engaged in legal proceedings with franchisees on the network, or any other signs of an unhappy familial relationship.

You should also take the time – as I've argued recently – to go and meet some of the real franchisees already in the network. They'll soon tell you the level of support you can expect when you join.

A family where every member works hard

Franchises are acknowledged to have much lower failure rates and greater profitability than other new business types even by their detractors.

There is a reason for that. It's not just the big-name star-power of the franchise magically opening all doors for the franchisee. Nor is it the franchisee slaving away while the franchisor reaps all of the rewards.

It's because of the way an effective, growing franchise works is like a family. A family where every member needs to work hard, certainly. But a family all the same.

What do you think? Do you agree?

Comment below. Let's get the conversation started!