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Preparing a Regional Business for Expansion into Franchising

Three golden rules for launching your franchise venture.

By Ram Katalan

 

You have been a successful regional business for years, perhaps even decades, and your business is thriving. Do you feel “ready” to make the leap into franchising?

The decision to expand into franchising is a big and risky step, especially if you have never run a franchise business. You may be asking: How do I know if my regional business is a fit for franchising? How do I learn about franchising? How do I prepare my employees? The good news is all of these questions can easily be answered. You can greatly reduce the risk and prepare your regional business for national success with these simple steps.

First, be prepared. Your franchise expansion will not be successful if you don’t arm yourself. The right approach and knowledge are key. Here are my franchising golden rules, the three “E’s” for expanding into franchising:

Evaluate: Start by looking at your own business. Prepare a revenue model of your existing business and make sure your profitable business model can be duplicated, so others can  be profitable.

Educate: Join the International Franchise Association and use its resources to educate yourself on franchising. Participate. Attend its meetings. Take advantage of its offerings, such as the mentor program. Everyone at the association wants to help and they want you to succeed.

Exclusive: Be Selective. It is difficult when you are starting not to be tempted to sign up the first interested franchisees that come your way. But, it is critical to keep your franchise opportunities exclusive. Be very selective when choosing your franchisees, especially your first few. Your first franchisees are the driving force of your future success. Carefully interview them, check to see if their personalities, mindsets and goals fit with yours and make sure they have realistically set  their expectations.

Once a foundation is in place with the “Three E’s,” these additional tips will add to your success and continue to guide you through the world of franchising:

  • Complete a franchise seminar and compliance program. You want to ensure you don’t sell a franchise without going through the proper legal steps. If you are not set up legally, not only can you get into trouble with authorities, you might be sued by your franchisees as well. The IFA Compliance Program is a great resource to learn some of the legalities of franchising.
  • Consider becoming a Certified Franchise Executive. Go from not knowing anything about the franchise industry to knowing a lot. It’s a very well organized program.
  • Create the avatar of what you know would be your best franchisee. It’s important to get people into the system who have the right skills and mindset. Remember, you can’t fire them. It is critical to be even more selective when you are hiring an employee.
  • Hire from within or outside to fill needed positions in your regional business. I realized my managers and team members were already excellent at running the everyday operations, so I stepped back and let them. This allowed me to spend 50 percent of my time putting the franchise together. Get the extra help you need.
  • Decide whether to outsource or not. It’s important to know if you want to do all the franchise expansion yourself (with the great help of the IFA) or if you have the budget, consider hiring a professional to help you.
  • Build a national presence. It is extremely valuable for your regional business brand to gain national recognition before you even think about expanding into franchising. Through marketing and public relations outreach, get national eyes on your brand outside of your region via media articles, blogs, awards, speaking engagements and more. Your brand recognition will help lay the groundwork for your franchisees’ success.
  • Decide which business operations the home office is going to handle and which tasks the franchisee office will do. For instance, will your office handle the marketing and PR for your franchisees, or will they be doing it themselves?
  • Create video tutorials to teach people how to build your business from scratch. Videos will save you time and keep the advice and messages consistent for all new franchisees.
  • Expanding your regional business into franchising is an exciting adventure. If you simply take the time to: evaluate your current business, educate yourself and take an exclusive approach to signing franchisees. Then the stage is set for it to be a great and  successful adventure.

Using Yelp to Attract Customers and Manage Your Reputation

The idea of reputation has changed over the past few years. It continues to change and evolve every day. We’re living in a “reputation on steroids” world. Customers are posting reviews of businesses online and relying on reviews to select the businesses they shop. It is critical to know how to respond to this new world, protect your reputation and use it to your advantage. One of the largest and most powerful online platforms for business reviews is Yelp. So how do you respond to Yelp reviews, protect your business and use it to grow? Here are five tips to guide you.

How can I make money on Yelp?

Unfortunately, there are no shortcuts when it comes to reputation. Yes, you can make a lot of money if you do well on Yelp. It all goes back to fundamentals: under-promise, over-deliver and wow your clients. Imagine connecting with a client who trusts you and wants to use your service before you even speak to him. That is the power of Yelp. However, doing a good job is not always enough to have a great presence on Yelp.

Are all Yelp reviews created equal?

No. You can get a raving review from a loyal client who does not have a strong Yelp profile. Although you earned this review, Yelp may send it to the filter because Yelp’s algorithm is trained to treat new reviewers with suspicion. What can you do? Search for people by name or email address if you can, and if they have strong Yelp accounts (many reviews, friends, pictures, etc.) treat them as a restaurant would treat a food critic. Then apply those techniques to all your clients. You’re building your reputation, remember? Treat all reviewers as if they were professional critics and reviewers. You’ll be rewarded for your efforts.

Should I respond to reviews, even negative ones?

Yes. Remember, you are not only writing to one person. You are also writing to the millions of people who read that person’s review. Be polite, responsible, and factual. Be sure to reply to positive reviews as well. Be personal but professional, you don’t want to invade the reviewer’s privacy.

Should I advertise on Yelp?

Yelp replaced the Yellow pages. It is cheaper and gets more eyes targeted on you. Buy advertisements, but remember: organic results are the best; just like Google organic results (which are free of charge), organic results are more effective than the paid ads such as Google pay-per-click campaigns.

How do I become a part of the Yelp community?

Have conversations with members of the Yelp community. Make no mistake, Yelp is a community. It has friends, influencers called “Elite Yelpers” and direct messages. So, if you want to be an insider, instead of the big corporation standing on the outside yelling “me, me, me,” open a Yelp account and participate in the conversation. If you have other team members in your organization, speak with them about becoming Yelpers as well.

Write about your last restaurant experience, your mechanic, whatever. This way when you communicate with a “Yelper” you will be doing it authentically as a part of his community. It sounds completely unimportant, but I believe it matters because it makes the whole interaction more authentic and allows you to understand how “Yelpers” think. 

Ram Katalan is co-founder and CEO of NorthStar Moving. Find him at fransocial.franchise.org.

 

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