5 common mistakes to avoid when franchising your business

By Sam Christopher Lim, Senior Vice President, Francorp Philippines

Posted at Jul 27 2014 08:36 AM | Updated as of Jul 28 2014 10:37 PM

MANILA, Philippines - Franchising can accelerate the growth of your business, but it is like building a house, you need to build it on a stable foundation.

So here are a few common mistakes you should avoid when franchising your business to make sure you build on a solid base.

1) I don’t need to write down my process, it’s so simple I can just teach the franchisee.

A properly developed operations manual is crucial to the success of a franchise. When developed with a professional, the process of developing the manual can bring out new ideas of improving and optimizing your system. In addition, it serves as both a guide to the franchisee as well as a legal agreement between you and the franchisee.

2) My competitor offers this franchise fee and royalty, so I will just do the same.

Every business and every industry is different. The most successful franchises like Jollibee, The Generics Pharmacy and Reyes Haircutters carefully worked with franchise development consultants to review the financials of the business and set a franchise fee and royalty that will make both franchisor and franchisee happy. This is important to ensure that a win-win partnership is established.

3) I’ll just download the forms and agreements from the internet.

Though the internet provides a wealth of information for entrepreneurs, franchising is more than just the forms and agreements. It is a carefully developed program that ensures the success of all parties involved. Common forms and agreements may not be enough to build a strong foundation for your business.

4) I have so many franchise inquiries already, I don’t need to do any marketing.

Finding the right franchise partners is one of the most crucial activities in franchising. From 100 leads, only 2 to 3 are usually truly qualified and fit to run your business. So marketing your franchise to your target is important so that you generate the right leads.

5) This person used to work as a franchise manager and said he can do my program for a cheap price.

There are 5 steps to franchise development – operations manual development, franchise structure development, franchise marketing, franchise sales and legal development. Each of these steps requires a specialist to properly develop and guide you along the process. Not one person has enough experience and capability to be able to do all of this for you at the quality that you need to grow your business exponentially.

Franchising allows you to grow your business from one to many. And if done right, it allows the entire franchise network to grow exponentially. Taking shortcuts at the start is like building weak foundations for your house, if you build too much, it will eventually crumble. So do it right from the start, avoid these common mistakes, invest the time and money upfront and you will enjoy the unlimited growth potential of franchising.


Franchise Talk is a content partnership of ABS-CBNNews.com with Francorp Philippines. To know more about franchising, email [email protected] or visit www.francorp.com.ph

About the author:

Sam Christopher Lim is the Senior Vice-President for marketing & strategy at Francorp Philippines. He has over a decade of global marketing experience from Bangkok, Shanghai and most recently London. He is a multi-awarded marketer who graduated with distinction from Oxford University and was awarded with the Young Market Masters award. He is also currently Chair for ASEAN integration for the Philippine Franchise Association.