Franchise myths

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The Myths of Selling Your Business

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The 9 Myths of

Franchise SalesAnd how to replace them with Strategies, Science and Process

SQuare Consulting and Management Services

Franchise Consulting Division

603, River View, Athwalines, Surat – 395007

Gujarat – INDIA


Rohan BhattManagement Consultant & Founder - SQuareConsulting.IN

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Introduction

Which is the Biggest mistake that businesses

make? Is it planning to franchise too early? Is it

the wrong operations plan? Is it Wrong

Marketing? It’s the over all process of creating brand

value.

Brand Value, as we call it and know in our day

to day workings is not how much a business

spends on marketing or what is the business of

the store that is the base for the concept of

franchising a brand but rather, it is the sum total

of all the factors that contribute towards building

successful brands and business models.

Brand Development and Business model

development is the single most important aspect

of franchising and the business that does not get

this right does not stand a chance at Franchising

People perceive building effective business

models as a very expensive function for a

business. But except for the few initial legends of

Franchising, not many brands have focused on

developing an over all Business model or Brand

model for their businesses before their foray into

Franchising.






Introduction continued

We’ve developed this e-book to help you identify

those myths in your own business and replace

them with strategies, science and process. We

want to help you treat franchise sales as a

proactive rather than a reactive process.

If you’re a business owner, CEO or senior executive, you’ll

recognize most or all of these myths, and you can

start doing something about them today. And

even if you’re not the CEO or a senior

leader, understanding these myths and this

advice

can help you as you work day in and out to

propel your company and your career.

We’ve been helping companies generate revenue

since 2008, and we can guarantee that these

myths aren’t just pointers, they’re warning signs.

So let’s get started. Here are the nine myths you

need to eliminate from your head and your

business.






A Business Model can be franchised

because it is popular!

Here’s the scenario: You have started a new business and people seem to like it very much, you think

of this as a very appropriate indicator to think of expansion and someone says “Hey! Why don’t you

think of Franchising your brand?” You give it a shot and you’re a Franchisor. The Business is not that

old in terms of its establishment or the operations structure is not standardized but you think that

franchising is feasible without any prior homework.

Unfortunately, that is not at all true. The main focus

of a brand becoming a franchise brand is to be able

to define a business model in the correct manner

and before Franchising a business model it is

imperative to standardize and develop it in the

correct manner. The Business model has to be

developed in terms of its identity as well as the

workings of the brands.

You have to define the business and its model as

well as develop it as a brand and provide it with an

identity.

1






continued

Instead of looking for “expansion,” you should

focus on finding the proper strategic fit for the specific

operations and model of the business.. To do so, you

need to truly understand your customers. Why

do they buy from you? Is their buying decision

based on your brand, its identity, its workings or

the uniqueness it has to offer? Is your offer

based on individual store experience or a defined

business model? Does the selling involve a

concrete strategy, a definite brand or a working

plan? Are you selling something that’s new to the

marketplace or considered a brand with value?

All of these variables influence the profile of a

successful expansion for your brand; you

may need a completely different profile than you

originally envisioned. For example, instead of

successfully franchising a location based business

you might develop a business that is unique and

dynamic in terms of its approach towards the

location it is in. Business profiling tools can be

extremely helpful if you’ve accurately done the upfront work

of determining the profile most likely to succeed

with that particular business model, buyer and sales

process.

Do your homework before starting the interview

process. Otherwise, the most gregarious business

buyer will win. And you will lose.

1






Franchise Sales and Marketing are

dependant on hit-and-miss tools.

There are various styles of selling a business and

different businesses have different types of

selling styles. The Successful Selling of a

Franchise System is equally dependant on

developing an effective business plan as well as the

implementation of a carefully developed Marketing Plan.

Most Business owners neglect the facts and go

for a very simple and instinct based approach

towards their strategy on the initial stage, which

is highly risk oriented.

You can not go about in the market just

blabbering random details of the business and its

aspects on basis of perception and expect people

to get interested.

This type of business sales may give you a few

units (call it fluke) but in the long run, an

organized and structured business model with

clarity is what is being sought in the market.

2






continued

Now, if you think that your business model

and its structure are perfect, consider going

through your business once again in detail

(We mean Excruciating Detail), understand

the true essence of your business as well as

the way it works and functions.

Now, go through the existing structure of

your business model and define what are the

aspects that will make up for the identity of

this business model and work an a defined

set of guidelines to keep that definition

intact. Voila! Your Business model is

defined.

2






Good Marketing = Good Franchise Sales

It is a well established myth in people that good marketing is

equivalent to good franchise sales. The fact is that it is not

only important to be able to go for good marketing and lead

generation for your brand that gives you great franchise

sales, but also the application of the correct franchise

recruitment strategy which focuses on conversion of the

leads to prospects and prospects to deals in the most

systematized and organized manner.

The true success in the above endeavour can be worked up

by developing an effective and organized strategy of roll out as well

as to establish a defined plan for working out a brand

structure for operations to be able to focus on the core

competencies of the brand and its positioning whilst the

process of lead generation process as well.

3






Quality products along with good branding

is a winning strategy.

Quality products along with good branding is not a

winning strategy altogether as it is the primary pre requisite

even before starting franchising.

When we talk about a winning strategy, its more of

defining the type of a business model which will be in

concern and the over all analysis of the business with all

its pros and cons will constitute an advanced and

structured model. Talking about the actual strategy that

has to be considered is to primarily understand the fact

that there is no scope for improvement if you are

satisfied at any level with the business model or the

strategy that you have developed. The only thing that is

constant in a business model is its ability to be dynamic.

Its better to think the other way around in the business

of selling business.

4






There is a Winning Strategy after all!

An ideal scenario in the imagination of each of us is

that we have a quality team of highly skilled Franchise

Sales Representatives let us put a figure of 5, 10 or

maybe 15 reps here and we figure out that if they call

up say a hundred people on a daily basis for about a

year we can get at least a 10 – 15% strike ratio for

sales. True?

The answer is sadly FALSE! The number of Franchise

sales reps does not guarantee success, nor does the

number of leads does. The things that guarantee

success are... Hold your breath, NOTHING! Nothing can

guarantee success. There is no correct formula or

recipe to success but yes, focussing your energies in

the correct direction might give you an edge. Lets say,

a well structured business model for starters and a

defined and segmented strategy for roll out.

Yes, The Sales Reps do make a difference, but

try and create a force of consultants rather than

sales call representatives. Business is a tricky

area and treading the path with experts is a

better choice.

5






Good Franchise Sales depends on only the

correct business model.

Research has shown that business models that tend to be

effective do not have the correct strategies going hand in

hand and vice versa. For those businesses where all are

concerned and evaluated, the scenario changes drastically.

This is what defines the importance of the correct business

model along with the correct targeting and positioning of the

business proposition when thinking of expansion through

franchising.

Every sales person, including the experts who develop

strategies should know the thumb rule of successful selling;

Need to develop focus on the correct quality of the

prospects, whether it is the development of the lead

generation source or the strategy for the development of the

lead. If we talk about an example, consider the following

simple case study:

Contd...

6






Continued6

Case Study:

Case in concern – A Leading Cafe chain based in Maharashtra wanted to expand through the franchise

route, the strategy was simple yet effective, get the maximum number of people to get to the business

and make them fall in love with the business model, so they experimented with a very serious type of

model – FOCO (Franchise Owned and Company Operated) where they took the investment from the

franchisee but managed the show on their own. The operations of the company was strong and the

team was young and dynamic but instead of getting the franchisees who could understand the little

details of the business, they ended up with maximum franchise owners to be pure investors who

wanted their returns on their previous experience as real estate investors. This lead to complete chaos

and the company was not able to sustain the 40 – 50 Store chain and eventually collapsed.

This was a clear case of lack of understanding the correct kind of target audience for the business

model. This is what you don't want to do for your business if you want to grow the correct way.






A Large plan needs to have Large scale

beginnings

This idea can easily become a scapegoat. If I

visualize becoming a large scale franchisor, I need to

spend an awful lot of amount of money in the

beginning which includes a large office, lots of sales

people, a huge branding and marketing budget with

the national leaders in the market and multiple

offices for operational support.

The key issue here is accountability. As the saying goes,

“Rome was not built in a day” and neither will your

brand be. You need to make sure sales and

marketing are focused on the right inputs and right

results. You need to evaluate ROI, identify and track

against metrics to make sure you’re spending the

budget and time in the right place. Just upping the

budget and investment isn’t a formula for success.

7






Always stick with a winning strategy.

A Few years ago, the whole concept of Franchising was

alien in our country, the market had mostly limited

options and even more limited industries; so the right

strategy was to stick with the original leaders and

follow their footsteps towards successful existence and

growth dynamics. Today, the scenario is quite different.

Today, the market has more options than ever, even

the global market leaders view India as a stable

growing nation with huge untapped potential.

That macro market watch “strategy” worked for awhile.

But today their story is much different. The market has

developed much beyond the need for big brands or

swanky business models, today the market even needs

local brands to develop and emerge with standards of

the biggies and expand their horizons.

8






continued

The only thing that it suggests is that be it any

business, whether local or international. Your business is

always, always, always in transition. You're in transition

because the economy is transitioning. You're in

transition because your customers are transitioning.

You're in transition because your competitors are

transitioning.

Any strategy is only going to work temporarily. You have to

consistently monitor your environment, understand your

offer, and know why people are (or aren’t) excited about

doing business with you. Why? Because it's going to

change. Today’s strategy is not necessarily going to

work tomorrow. If you don't watch the key variables &

elements that impact you, pretty soon you’ll find out

that the game has passed you by.

8






Listen to customers - they know what

they want.

This is the tricky one. It's half right. Yes, you should listen to

customers. Absolutely listen. But don't believe for a second that they

know what they want. Focus group after focus group after focus

group will say, geez, if the business was not on this scale or of

this type, I would have taken it. And you change your business

model to accommodate the interests of the “prospect”.

The issue here is commitment. “I would buy it” is hypothetical.

Customers may think it sounds good; they like the idea. But

just because they say they like it or want it doesn’t mean that

when the time comes, they’ll pull out their wallet or pen and

buy.

At this critical juncture, remember the only rule that defines

everything in sales. The definition of Demand. Demand is the

want or desire for anything backed by ability and willingness to

pay for it.

9






continued

When your prospects tell you something that they want, you need to hold them accountable and get them

to make a firm commitment. For example, you can say, great, if you want a smaller business module,

we can work it out with a minimum cluster commitment of X units, are you ready to make it happen?

And if they say, oh, no, no, I’m not ready for that, or I’m not sure, or whatever the excuse, then you

know that’s not something they really want.

If you’re going to ask customers to

provide input on products and

services, listen carefully and hold

them accountable. Their responses

aren’t real unless they’re willing to

make a commitment.

9






Conclusion

Everybody wants to start a good and profitable business for

themselves and make good money. And honestly, everyone

deserves to do so as well. But the real question here is, at what

cost?

Franchising is a science. It has principles and it has best practices. So

if you want to expand with it and if you want to grow, you have to

make the decision to apply the science. Eliminate the myths.

Apply the best practices. Create the discipline.

Yes, it’s work. It’s the most expensive thing your company does

each day, and it’s the most important thing your company does

each day. And if you eliminate the myths and treat franchising and expansion

as a science, you'll get results.






About usRohan Bhatt and Yash Bhatt co-founded SQuare

Consulting with a desire to give excellent Business

startup and expansion strategies and solutions to

businesses. The true roots for this passion for giving

results to businesses comes from the innate love and

affection towards the entire art and science of doing

business and the immense experience both of these

hold in various types of businesses across multiple

industries.

Some of the companies they have worked for / with

either jointly or individually are:

• Mahindra Holidays and Resorts India Limited – Leisure/Travel/Tourism

• Raytrace Enterprises – IT / ITES

• Orion Edutech – Vocational Training and Development

• Cosmopolitan Solutions – Outsourcing / BPO

• Meghani Commercial Services Pvt. Ltd. – Media/Dotcom/Entertainment

• Cosmic Structures Limited – Real Estate

• Franchise Mart India Pvt. Ltd – Franchise Consulting and Media

• Franchise Today – Publication / Print Media / Magazine






About us continued

Rohan Bhatt has spent the last decade focused on his passion of “Problem Solving" for businesses as a

science and art at the same time. He has spoken at professional conferences and written for magazines

and also submitted research papers during academics and work both, he has successfully spearheaded

major business expansions, been a national sales manager in the real estate industry for leading project

development company, formed a national consulting company in business consulting and management

called SQuare Consulting, and developed several sales tools and business models.

Yash Bhatt has focused his career around public relations and corporate relations. He has been the

marketing head of a website and a branch level head for a travel / leisure company, sat on industry and

professional boards, orchestrated the successful turnaround of several financially distressed businesses,

implemented performance management processes and metrics, and ran the sales/marketing efforts of a

company voted "best in the industry" by its peers.

To learn more about SQuare Consulting’s services,

please visit www.SQuareConsulting.IN or call (+91) 99744-85505



http://www.squareconsulting.in/




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Thank youRohan BhattPhone: (+91) 99744 – 85505

Email: [email protected]

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