Episode 231 – Expand your business with a franchise
An expert guide on how to successfully market potential franchises to investors
In today’s podcast, we are speaking with Roberto Pena from Hermes group serving the city of Toluca Mexico with commercial cleaning services. The Hermes group has a long history in the cleaning business as it was started by Roberto’s parents over twenty-five years ago, now he and his brothers have taken over for their parents and have expanded to more than five cities across Mexico with over seventy employees and two main offices. With their cleaning business having great success they have been able to branch off with a construction company which has been in business for over seven years. They have developed a training program for other companies to reduce turnover rates dramatically. Check out some of our training on starting a cleaning business as well.
RESOURCE ALERT: Tips on how to successfully franchise your business https://oldsite.growmycleaningcompany.comcleaning-company-sales/
There are four steps Mike has laid out as a guide to set yourself and potential franchisees up for great success!
Do something that can be easily duplicated and that the franchisees can see from start to finish. You will want to set a standard and show that if you put in the work, they will be successful with their resources
Ensure that all of the tools needed to be successful are available. Have guidelines laid out, marketing plans, and a list of those who they can go to for questions.
Hire a specialist who knows all the ins and outs of franchising. A franchise specialist can help you with paperwork, and they know how to keep you legal and to follow all of the laws regarding your business and location. They can also conduct a growth plan as to how you should grow your franchise over time.
Write up a marketing plan for prospective franchisees. Figure out who you are looking for.
– How much money they need up front
– How much experience you would like them to have if any
– What kind of net worth they need to have
– Whether you are looking for someone who can be full time as an owner-operators or someone who is looking to only make an investment
Be very clear with your marketing plan as to who you would like to attract. In doing so, you can have more qualified people applying to be franchisees. Then you can scan through the applicants and choose who you feel will be the most successful owners.
RESOURCE ALERT: How to set yourself and future franchisees for success https://www.youtube.com/watch?v=SDJS2BD38zU
While in the beginning steps of franchising it is important to check the laws and regulations of your local legislation and law-making authorities within your country or state about running a franchise. If you hire a franchise specialist, they should have the information readily available to guide you in the right direction. Branching out with a franchise is certainly a good way to go if you are looking to step back as a front-line owner and have the option of another owner who will give you a percentage. This typically ranges between five to ten percent a month of the revenue accumulated. Usually, when you run a franchise you want to have three or four company locations established that you have put in place with a manager to ensure that those locations are profitable within the span of a few years. This helps when you want to sell to an outside person as you can prove the business’s profitability and that you can duplicate and still be successful. When you can show that the locations have had significant revenue, the locations are established and being managed well those are great selling points for the potential investors. You will want the franchisees to know that the location has been successful in a short amount of time and that the establishment can do well without the help of a home office but will strive with the name recognition and respect that the company has gained. Set the franchisees up for success with an operations manual that will break down in detail everything they may possibly need to know about owning and operating a business. You can list things such as:
– How to attract customers and employees
– How to hire and fire employees
– How to pay employees
– A guide on how to train and how to make those exceeding a manager
You’ll also want to explain about buying a separate space or office to expand. You can list things like:
– How big the location should be
– Where the office should be located
– How much should they pay employees
– Whether there is a need for a warehouse
– At what point they should buy or at what success with revenue would be ideal
These are the types of metrics you should have readily available for your franchisee so you can guide them from bottom to top. You must keep in mind that typically you are selling to someone who is starting from scratch.