Since 2013, the number of franchise establishments operating in the United States has jumped from 697,943 to 759,236 in 2018. The franchise business model is expected to remain strong in the years to come as the Federal Reserve plans to increase interest rates, which means prospective franchise operators will likely try to lock into an agreement before commercial lending rates get too expensive. Here are a few things first-time franchisees will need as they embark in their new business ventures.
Operators of major franchises such as McDonald’s and Subway do not have to worry too much about marketing plans because the company takes care of branding at a global level. All other franchise operators should treat marketing as a priority and should execute strategies according to a written plan that covers at least two operational quarters. The marketing section of a business plan is not enough; a marketing plan should stand on its own with details, goals, and contingency measures in place.
I-9 Verification of Employment
Compliance has become a crucial aspect of the franchising business, particularly in the current Trump administration. Employment verification audits by Homeland Security as well as by the Immigration and Customs Enforcement agency are being conducted very frequently. Operators should have a dependable method of performing I-9 verifications along with other employee screening tools. Preferably, these online tools should allow employers to keep a digital document trail for audit and compliance purposes.
Reasonable Information Technology Infrastructure
No company will be able to survive in today’s highly competitive business environment without a strong digital infrastructure. With cloud computing solutions, new franchisees do not have to make heavy investments in terms of hardware and IT staff. The solutions do not have to be too sophisticated in the beginning. For example, a pizza delivery franchise can get started with a point-of-sale system, a few VoIP lines, and a web hosting, package.
Some franchise chains offer training to managers, but this does not usually extend to new employees. It is up to franchise operators to properly train their staff members, and this calls for the development of a training program. Similar to the marketing plan, a staff training program should be thoughtfully written and executed to the letter with measurable goals.
In the end, the business processes listed herein are just the beginning. Franchise operators will be expected to learn a lot about the brand they represent, and they must keep an open mind as their new businesses develop and mature.