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What Franchise Model Is Right For You?

Learn what factors determine which franchise model is right for your business.

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Franchise Model

Franchise Model

Many years ago, the most common franchise was the traditional brick-and-mortar location such as fast food restaurants and storefronts. Modern technology has brought a variety of business models to the marketplace that offer several different models to choose from.

Related: What Is The Future Of The Franchise Model?

Home-based businesses

Home based businesses are very popular these days since technology has made it possible to perform many business activities remotely. These businesses include accounting and professional services, consulting, digital and other marketing services and a variety of other models.

These franchise models offer owners many benefits including lower operating overhead costs, fast and easy startup and the convenience of working from home. Consider the following when evaluating a home based franchise business:

  1. Are you a good time manager? Working from home allows you to live and work in the same place, which is great for some but a nightmare for others. Many have a hard time concentrating on work with the distractions of home such as children, pets, spouse or even TV or home projects. On the other hand, many struggle with stopping the work to enjoy family time.
  2. You should give yourself specific starting and ending times to create a regular work schedule.
  3. Have a door with a lock. You will need to have a private and professional workspace. Additionally, it is equally important for you to be able to shut the office door at the end of the day and focus on home life.

Related: 5 Strategies For Franchise Leadership Development

Mobile businesses

Mobile businesses

Some business owners prefer to work out in the field as opposed to being tied to an office or storefront. Mobile businesses can be flexible and offer lower startup costs. These businesses include food trucks, home and business repair and maintenance services, pet grooming and other creative service models. Here are a few things to consider:

  1. Make sure that your franchisor offers a strong marketing programme. Mobile businesses do not have the benefit of walk-in traffic so they must generate all of their business with outbound marketing efforts.
  2. Use technology to maximise your efficiency. Time is money as they say, especially when you have to factor in travel time between paying jobs. On demand scheduling apps, mobile point of sale systems and communication tools can add to your bottom line when implemented properly.
  3. Check your homeowners association (HOA) rules if you plan to park a commercial vehicle outside of your garage. Many HOAs do not allow any vehicles, including trailers, with logos or wraps to be parked in plain view.

Brick-and-mortar businesses

Brick-and-mortar locations include the standard restaurants, retail, hotel, storefront and offices. This model offers the potential benefit of walk-in traffic which may be a better fit for someone who is more comfortable having customers come to them as opposed to business models that require outbound marketing or sales. This model generally requires more planning and related expense due to the build-out and construction of the site before opening. Before you decide to open a brick-and-mortar franchise, you will want to keep the following items in mind:

  1. Location, location and location are said to be the three most important factors in the success of a brick-and-mortar business. Proper due diligence is mission critical to ensure the best location. The franchisor may offer site selection assistance or refer you to qualified service providers that can help you find the best options.
  2. Use a qualified commercial real estate broker. You should interview a few brokers to make sure that you find one that you feel will best serve your needs. You may find a broker that has experience in your specific business category, which can be an added benefit.
  3. Read Brick and Mortar Franchise Success by Carolyn Miller. Miller is the founder of the National Franchise Institute, which offers classes and education for location-based franchise operators. This book offers a wealth of money and time saving tips and trick that are a must for anyone opening a brick and mortar franchise.

Most franchise owners report that their business lifestyle was a determining factor in their choice of a business model. Consider the “day in the life” of each franchise model to see how they match up with your ideal business before you choose. You should be able to visit existing franchises or participate in a discovery day visit to get a good feel for how each model operates.

This article was originally posted here on Entrepreneur.com.

Rick Grossman is a leading franchise industry expert with over 20 years of experience in helping both franchisors and franchisees grow their businesses. A successful franchisor himself, Rick developed a high tech/high touch franchise marketing and sales system selling hundreds of franchises in North America capturing ranking in Entrepreneur magazine’s Top 500 franchises in less than three years.

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Franchisors

Osteostrong: An Exploding Global Movement Of Positive Change

A Kyle Zagrodzky Article by Dirk Coetsee.

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Kyle Zagrodzkys’ sincere passion for what he does made me smile in recognition of traits that I am always searching for in a leader, which is a love for people that is drastically enhanced by the positive multiplication factor of having the heart of a servant.

The climate of the interview was one of tangible enthusiasm as the author witnessed a serial entrepreneur at the cusp of global expansion, share his thoughts on his company with refreshing transparency.

The CEO and founder of OsteoStrong speaks with a sense of awe, visible in his eyes, of his business relationship with Tony Robbins and his mission to change lives through this innovative franchise system.

Yes, you read correctly, the iconic performance coach and entrepreneur Tony Robbins who authored Awaken the Giant Within and recently Money Master the Game: 7 Simple steps to financial freedom, is a very enthusiastic and committed advocate for OsteoStrong and Kyles’ business partner. Sincerely and truthfully sharing the same value system is often the rock on which sustainable, successful and world-famous business partnerships are built.

Related: Start A Service Franchise: Cash In On These 3 Successful Models

The franchise system OsteoStrong, is the collateral beauty emanating from Kyles’ most highly regarded value of giving to others and is set to become a global phenomenon within the next couple of years.

OsteoStrongs’ patent-pending robotic technology is based upon the research of Dr. John Jaquish, PhD who’s journey in life sciences started when his mother told him that she was diagnosed with osteoporosis. He invented a device that’s purpose is to trigger the effects of high impact loading without the risk of injury. The result of a once-weekly treatment utilising this device is over 14% gains in bone density in both the spine and hip over a just 6 months!

The reader, at first glance might have the same impression as the authors initial paradigm of this systems’ value offering, that is simply put, that OsteoStrong is the most effective cure purely for those at an advanced age with the focus of combatting or preventing osteoporosis.

The above assertion is however a dramatic deviation from the whole truth. Although this system is proving itself to be the most advanced and effective cure for osteoporosis, any athlete engaged in any discipline and of any age can receive a vast range of performance enhancing benefits from this innovative system.

When you increase your skeletal strength, it dramatically impacts your total strength output. As an example, during a four-year case study that engaged 500 subjects, the average strength gains were increased by a whopping 290%. These results were achieved through a total of 1 session per week at seven minutes per session.

osteostrong

The author was amazed to learn from Kyle first-hand that the awe-inspiring and very typical results are achieved with virtually no effort on the clients’ part. Your total commitment as a client is to go to a facility once a week for seven minutes, engage in four extremely safe “trigger events” (high impact loading) dressed as you are to receive a plethora of benefits over time.

Related: 7 Laws Of Great Pricing

It is common for clients to see a rapid and vast improvement in speed, agility, and balance. Clients also in general report that general niggles such as shoulder, lower back and knee pain disappear. A compound effect of the combination of all the benefits mentioned is a much-improved general sense of wellbeing.

OsteoStrong does not compete with anyone in the gym or wellness industry. Instead, its highly unique value proposition compliments the offering of all businesses related to fitness and health.

This cutting-edge innovation is a franchise system, a business, yet more importantly it is exploding as a global movement of positive change. Commitments for the development of over seven hundred and fifty franchises have been signed and the franchise management team is working overtime to keep up with the amount of franchise enquiries. They do keep up though, as their commitment to positively affect as many lives as they can, is unshakeable.

As the author was about to end the interview with Kyle he recognised a certain peaceful look on this business leaders’ face that can only be derived from a sense of knowing that he is changing lives and making a difference through sincere giving. We are all heartily invited to take part in this movement of positive change that is OsteoStrong, and for the sake of our own general wellbeing we should not turn down the invitation.

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Franchisors

Get Into Your Franchisees’ Good Books: 4 Ways To Communicate Better

Build a better relationship with your franchisees to avoid conflict and strengthen your brand.

Diana Albertyn

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franchising-communication

Your franchisees weren’t chosen on the basis of a friendship criteria, so it isn’t surprising that you may not get along with all of them. If they were just tenants in your building, that would be fine – but as partners in your business, your relationship with them should constantly be worked on, especially by you.

“Ultimately, the best relationships – whether personal or commercial – are typified by mutual respect and trust,” notes Sally J’Arlette-Joy, founder and CEO of Sandwich Baron. “Communication is key to keeping all parties informed about changes, potential issues and success factors.”

How well are you communicating with your franchisees? Do you know what their pain points are? Are you open to their ideas for the business?

Here’s a guide to building and maintaining mutually beneficial relationships between your franchise and its network:

1Create and maintain multiple communication channels

Leverage the power and convenience of technology to interact with your team when you’re unavailable in person. Not only is everyone aware of any changes or developments, it’s a simpler way to communicate with everyone at once, getting the message across quicker and in more ways.

Related: Communication: The Glue That Holds Business Together

“To be effective, however, the communication needs to be more than frequent,” advises

“It needs to be honest. Get caught in a single half-truth, and trust is destroyed.”

Emails, WhatsApp groups and productivity apps are great ways to communicate in-between monthly or more frequent visits.

2Hone in on honesty

Transparency is a key factor and requires you to trust your franchisees to run an honest operation. They should also be able to know you trust them, allowing them to return the favour.

“If, for example, an operation uses mystery shopping to uncover violations of standards and under-reporting of revenues, franchisees should know about it,” says franchise consultant Mark Siebert. “Hiding this from franchisees will foster distrust and conflict.”

Trust isn’t easily repaired, so emphasise its importance to your franchisees and practice what you preach – always be open and approachable, no matter the situation.

3Keep an open mind for opportunities

mcdonalds-filet-o-fish

Most menu innovations, like the McDonald’s Filet-o-Fish – invented in 1962 by Lou Groen, a McDonald’s franchisee – don’t come from head office, but the guys running the network on the ground. They’re a result of a franchisee being unafraid to raise their hand, presenting a new idea, and being listened to by the franchisor.

“If a franchisor is willing to listen, and through meaningful dialogue between both parties, they may discover new ways to help the franchisee grow the business or exit the franchise as painlessly as possible,” says Monisha Prem, corporate advisor at M. Prem Inc.

Related: The Changing Face Of Business Communications

Strong relationships with your franchisees dictate their respect for the leadership of the franchise. Not sure how to go about strengthening your partnership as soon as today? Start by ensuring you’re aware how franchisees feel and how you can change or improve upon that.

4Steps to a successful partnership

Before you message all your franchisees for a coffee catch-up, remember that the quality of communication often trumps the quantity.

Keep the communication lines open by applying the guidelines below:

  • Whenever possible, take calls from franchisees rather than letting them go to voicemail; and always respond to messages on the same business day
  • If possible, establish a dedicated franchise support line
  • Every day, call at least one franchisee you haven’t spoken to in a while. Ask how they’re doing, how their family is, and what else your team could be doing to support their business.
  • Never speak negatively about franchisees to an employee in the company. Communications relating to franchisees should always be respectful.
  • Use a technology platform to track all communication with franchisees for staff members’ interaction with franchisees or should a dispute ever arise.
  • Appoint one person in the company as the communications manager, and have all system-wide communications filter through that, ensuring consistent tone and accuracy of information.

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Franchisors

How Cash Converters Grew Through Franchising

Franchising can provide quick access to capital, which is great if you’re looking to grow your business. But the franchising system isn’t without its challenges. Cash Converters MD Richard Mukheibir offers some advice for those looking to expand through franchising.

GG van Rooyen

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richard-mukheibir

Vital stats

  • Player: Richard Mukheibir
  • Position: Managing Director
  • Company: Cash Converters
  • Retail Turnover: R500 million+
  • Visit: www.cashconverters.co.za

In 1993, a business partner showed Richard Mukheibir a promotional video for Cash Converters, a company that was then showing quick growth in its home market of Australia.

“I was in IT, so I never really pictured myself becoming a second-hand retailer,” laughs Mukheibir. “But the more I thought about it, the more it made sense. This was just before the political changes of 1994, so we felt fairly sure that there would be a big expansion of the middle class. We would see much more upward mobility, which could be great for a brand like Cash Converters.”

Before long, Mukheibir was on his way to Australia. He liked what he saw and signed a contract to receive a master licence for South Africa. Two months of training followed.

Related: Cash In On South Africa’s Burgeoning Second-Hand Goods Market

Buying into a brand

“I’m often asked why we didn’t simply replicate what Cash Converters was doing in Australia. Why spend so much money on buying into an overseas franchise?” says Mukheibir. “There were two reasons for this.

“Firstly, even though the brand wasn’t known in South Africa yet, we liked the idea of bringing in an established and respected brand. At the time, second-hand retail didn’t have a great image. It was seen as dingy and somewhat unsavoury. Cash Converters had reinvented the concept and brought it into the modern age. We wanted to be a part of that.

“Secondly, I had an IT background, so I knew very little about the retail environment. It was important to buy into a franchise that would provide the training and expertise needed to set Cash Converters up in South Africa and run it successfully. To me, that is the whole point of a franchise system — it offers a proven business model that you can replicate. If a franchise doesn’t offer that, you have to question what the value is. Thankfully, that wasn’t the case with Cash Converters.”

When money isn’t a problem

Another great advantage of franchising is the ability to expand your business without having to bankroll that expansion yourself. In South Africa, Cash Converters embraced the franchising system and has managed to grow very successfully because of it. The business currently boasts 80 stores with another 20 in the works.

“The franchise model allows you to grow relatively quickly, since franchisees help to fund your growth. So, while access to capital is usually one of the biggest barriers to growth, it isn’t really the case with franchises,” says Mukheibir.

“But it brings with it some other challenges. When money isn’t a problem, for instance, you can be tempted to grow too quickly. Just because you have the money to grow, doesn’t mean that you should grow.

Related: Cash Converters Franchise Listing 

“There have been many instances where we’ve decided to slow the company’s growth, simply because we felt that the timing wasn’t right. We’re interested in long-term success, both for ourselves and our franchisees. We want multi-unit franchisees who stay in the business for decades.

“If you grow quickly through franchising, you might raise a lot of capital in the short term, but it could damage the company in the long run. It’s not just about the number of stores you have, you also need the structures in place to support your franchisees.”

Finding the right people

Cash Converters

According to Mukheibir, the biggest barrier to growth for a franchise company like Cash Converters lies in the finding of promising new franchisees.

“Finding great franchisees is our biggest challenge,” says Mukheibir. “We are very particular about the people that we allow to join the brand. It’s not just about the money, it’s also about the skills and energy that a person will bring to Cash Converters. For instance, some level of business acumen is very important to us. We want people who know how to run a business.

“Even more importantly, though, are the values that potential franchisees have. It all starts with values. Skills can be acquired, but you can’t force your values onto someone else. So, we start off by looking for people who share our values — who will act with integrity and always treat employees and customers with respect.”

People who can make the business model work

And how does Cash Converters go about finding these people? The most obvious way is to simply sell franchises to existing franchisees. By setting up multi-unit franchisees, the company knows that it’s dealing with people who can make the business model work, and to whom they would need to provide less training and support.

When it comes to new franchisees, Mukheibir and his team treat every interaction with a potential franchisee as a sort-of ‘interview’.

“We pay close attention to how prospective franchisees conduct themselves. If someone promises to send through a document the next day, does he or she actually do it, or does the paperwork arrive a week later? We try to find out if people are as good as their word. Once again, it’s all about values.”

Treating franchisees like partners

Cash Converters spends a lot of time finding the right franchisees, because it views them as partners.

“The success of your business depends on your franchisees. If they’re not making money, your entire business can collapse. Treating your franchisees like a revenue stream is a sure way to failure,” says Mukheibir.

“So, we treat franchisees like partners in the business. We visit stores regularly, and spend at least a day in each one. We also hold conferences where we explain the strategy of the brand and ask for input from franchisees. It’s important to us that franchisees feel as if they are part of a bigger organisation. We also believe that the brand is stronger when everyone involved is moving towards a common goal.”

Related: Jean-Pierre Seger Gives His Franchisor Perspective

Stay in touch with company-owned stores

To better understand the challenges of franchisees, Cash Converters also operates company-owned stores.

“These stores are a great place to test new ideas. So, we run pilot programmes in our stores, and then roll them out across our network, says Mukheibir.

“We also need to understand what challenges our franchisees face daily. Franchises fail when franchisors lose touch with what’s actually happening on the ground, which is why we operate our own stores.”

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