Will a Franchise Work For Us?
HOW TO GROW YOUR SERVICE BUSINESS WITHOUT EMPLOYING STAFF OR FREELANCERS
Do you want to grow your service business without staff?
This was exactly the position our client, David Green (not his real name), was in.
The Problem and its’ impact
David, who ran a successful service business wanted to grow his business but didn’t want to employ staff. He’d looked at franchise business models like those offered by fast-food giants and liked the idea. He couldn’t see how his service business could achieve this and how the franchise model applied to him. David was concerned about how growth would impact on his professional reputation so wanted to have some controls for maintaining standards and was worried about this.
David had previously grown and enjoyed a business using freelancers, but he didn’t want to repeat that method of growth. He had concluded that using freelancers was probably the only way he could grow his business. He felt uneasy about it and didn’t think it would achieve what he wanted from the business long term.
David initially came to see us about an agreement he could use with freelancers – that is what he asked us for first. As we talked about what this agreement would do, he shared with us that what he really wanted was to grow without freelancers or staff but didn’t think it was possible.
Our solution – what we did
We took a deep dive into David’s ideal business model with him and found out he had developed some resources which would be invaluable to someone who wanted to provide the same services as he did. He also had a particular way of marketing and delivering his services which, on our analysis could work well for a franchise model.
Whilst David had spent some time on perfecting all of the resources he had used to deliver his services, David had not got any written processes – his methods etc were all “in his head”, this is common when its one or two people delivering a service themselves.
We started by helping him put together an operational manual – a “how we do things to get this result” guide, which incorporated those valuable resources and methods. The idea was to write down all the processes and tools and put them all in one place to make it easy
- for someone else to understand and follow and
- to lay down standards which others (franchisees) could adhere to and which David could check up on.
After working with him on the operational manual, we then devised a system for bringing on franchisees which covered
- Who the ideal franchisee was – core competencies – experience, updating, attitude, CPD qualifications and financial ability to purchase the franchise
- How to find and market to ideal franchisees
- What was expected of the franchisee – we developed a code of conduct he wanted the franchisee to follow
- What the franchise included in terms of marketing, resources and support
- A process for dealing with problems complaints/ issues/ process queries
- The franchise fee – what franchisors would pay on joining and on an on-going basis
- How David would run his franchise and how this would change the way he spent his days
What could have happened without this solution?
David would not have had the business model he wanted and had to make a compromise in his business which over time would have created dissatisfaction and problems.
In addition, the lack of organisation and clarity would have been a potential disaster as he grew the business. This would have ended up damaging his professional reputation – something he wanted to avoid. He would have had more difficulty in selling the business as it depended much more on him and his services and this also would have reduced the price for the business on exit.
So, what was the outcome – what happened next?
David recruited immediately 4 franchisees (who each paid in excess of £20,000 as an initial fee) and started growing his business as he wanted to. He was able to scale the business and has grown year on year using the same model we advised on. His earnings now are in excess of double what he achieved with him doing the work and he has a business to sell which does not require specialist knowledge to run. This ensures a wider market for sale when the time comes.
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