Arab Franchise Times

Sary Hamway

Founder & CEO at the Franchise Trainer.

“In Franchising … You Don’t Know What You Don’t Know. As a Potential Franchisor, Be Wary of These Ten Unconscious Mistakes that Can Ruin your

Franchise Business. Many people do not know that the quote “You Don’t Know What You Don’t Know” is authored by Socrates. He is also the author of the quote “The Only True Wisdom is in Knowing you Know Nothing.”
Upon taking the strategic decision to embark your own business on a major franchise development program, you may not be able to identify the gaps in your knowledge of franchising. In fact, there will always be black holes in your knowledge .. inconceivable worlds outside of the realm of your imagination, expectation, or anticipation. This is why you need an honest and professional franchise consultant who has the skills and expertise to guide you through the process of franchising your business. A consultant may not be able to do your job as a business leader, but she/he is better in seeing what you don’t see. Better in strategic thinking, problem-solving, and establishing “KPI’s” Key Performance Indicators for your franchise model. An honest franchise consultant will always give you her/his best advice, and provide you with analysis, insights, and recommendations regardless of your own personal views, corporate politics, or hidden agendas of your management team.
Without further ado, let us get to the Ten Unseen Mistakes that Can Ruin your Franchise
1- Not knowing why you are franchising: Many business owners want to franchise because everybody else is franchising. In fact, the only drive that should motivate people to franchise is creating another source of income from franchise fees, royalties, levies and product sourcing to grow and expand the business.
2- Assuming that you can develop the franchise system on your own: Franchising is an independent business venture, and the franchise development process is comprehensive and complicated. Several managerial, operational, marketing and legal, and processes are involved. A franchise consultant with an excellent background & experience knows the nuts and bolts of the industry and will offer realistic advice & guidance to help you in making a good judgement and sound informed decisions. Thus, saving you time, money, efforts and energy.
3- Expecting that you know exactly what you need in franchising: You may think what a full franchise development program is much more than what you actually need, and that you can pick & chose elements of the program to reduce the consultancy fees. Any reputable franchise consultant who believes in the integrity of his scope of work will not accept breaking down the program into smaller fractions, because all elements of the program are interrelated and will affect other elements of the program.

4- Believing that the operating manuals is all you need: Franchise operating manuals are extremely important tools for the documentation of the accumulated business know-how & experience including methods, processes, procedures of running the day-to-day business.
Equally important tools in a successful franchise model are the initial & ongoing franchisee support packages, training programs, marketing plans, supply chain & product procurement, décor packages, intellectual property rights, and legal agreements.
5- Wanting to franchise without making organizational change: As a potential franchisor you cannot succeed in franchising unless you are prepared for change to transform organizational goals & processes, and to align your company culture, values & behaviors to support franchise expansion.
6- Having exaggerated expectations: Many potential franchisors believe they can establish hundreds of franchised locations in a very short time. This is not a realistic goal because what they are not aware of is the level and kind of organizational, operational & managerial resources they require to achieve this goal.
7- Thinking that franchise development is an inexpensive process: Investing in franchise development requires financial resources to cover different kind of expenses & costs such as consultancy fees, protection of intellectual property rights & registration of the trade name & marks, drafting of franchise agreements, production of identity & store design manuals,
technical writing, production of franchise marketing material, scaling up website & social media, and investment in research, technology & innovations.
8- Presuming that franchising is a way for making quick money: Some franchisors are desperate to receive the first check from their first franchisee, thinking it will resolve their financial problem. Of course, this is a prescription for failure. Franchising is a medium-term investment where franchisors must consider a 3-5 years Return on Investment plan.
9- Not knowing that franchising is a commitment to others’ success: Franchisees want to be part of your network because they desire to achieve the same level of success you have achieved in operating your own business. Your commitment as a franchisor to their success and profitability of your franchisees should be your top concern.
10- Going through an analysis paralysis: During my +33 years career in franchising, I met with business owners who are unable to make a decision regarding franchising their business due to lack of confidence, fear of failure (or sometime fear of success), which lead to over- researching too much information for a long time leading to endless cycles of evaluating the pros & cons of franchising until it becomes impossible to start franchising which leads to missed opportunities, and lagging behind competition.

Key Takeaways:
Avoiding these unseen mistakes will help you build a better franchise system, and grow your franchise network at a satisfactory rate. So, the easiest way to ensure your success in franchising is to simply follow the best practices, hire a trusted franchise consultant, and rest assured that she/he will act in your best interest since she/he depends on your franchise success to grow and remain at the top of her/his business.