Franchising provides a great opportunity for entrepreneurs to open their own business by purchasing the right to use a proven system, developed by someone else, in order to avoid the difficult learning curve of creating a successful business. Franchisors should provide to each franchisee in their system the following: site selection and studio layout, lease negotiations, business relationships, franchise training, advertising, employee issues, owner's manuals, manager's manuals and ongoing support. To make this process easy, franchisors typically provide their franchise owners with a checklist of items that need to be completed so that there are no surprises along the way.
1. Site Selection
Site selection and space layout is important to the success of any new business. The wrong location can cause a business to fail drastically. The franchisor can take the guess work out of selecting a site by providing demographic studies for all of their new franchise owners to choose the best location for the new studio. The top franchisors will even use a CAD system to print computerized drawings, which help the franchisees select the most efficient layout for their studio to ensure an open, comfortable atmosphere.
2. Lease Negotiations
Lease negotiation is a skill that can help in cutting initial start-up cost and rent over time. In most cases, the franchisor is able to save the franchisee thousands of dollars in the areas of rent, tenet improvements and costs per square foot, which ultimately increasing the profitably of the studio. I have found this to be helpful in streamlining the start-up process and getting new businesses open quickly.
3. Franchise Training
Once the location has been chosen and the studio set-up has begun, the franchisor will train the franchise owner at a comprehensive franchise school. This time is used to discuss important issues in running a business. Using an operations manual, which acts as a blueprint to success, the franchisor shows the new owner all aspects of the business operations including marketing strategies which have been created to increase client base and revenues. The franchisee is taught to use the customized software, which allows them to stay organized and to accurately track client data, billing, information calls and many other items. The franchisor trains the franchisee on employee issues, such as where best to find the right employees, whom to hire, when to hire, how to keep them, non-compete agreements and how best to handle employee concerns.
Most franchisors offer a toll-free help line for their franchise owners to call with any questions or concerns. This allows them to order supplies, discuss strategies, obtain a second opinion or get a little encouragement. Through the use of corporate web sites, the franchisor is able to provide each location with national exposure and customer contacts. Most top franchisors will continue to test advertising strategies and ideas at two or three of their locations in order to provide all of their franchise businesses with the latest, most effective methods of growing their business and to continually run creative ads and marketing strategies.
5. The Cost
Most franchisors charge an up-front fee for the training, assistance and business model. This fee usually ranges from $10,000 to $30,000. In addition to the start-up costs, there is a royalty payment each month of five to seven percent, which is calculated based on the gross revenue of the business. This cost is for the ongoing use of the system and support provided by the franchisor.
Rick Sikorski, is president of Fitness For Life (later changed to Fitness Together) studio. For more information on franchising contact Rick at 877.663.0880 x11 or at rick Sikorski@fitnesstogether.com.