A New Kind of Alignment
Franchising a business is one of the quickest ways to grow when you have limited capital. Unfortunately, it can also be one of the most complicated.
Many companies feel they have made their most important decision when they choose franchising as opposed to organic growth. However, the truth is that they have only begun the process of making hundreds of decisions, each of which could drastically affect their company. One of these crucial decisions is who to partner with.
Very few franchise systems grow to any significant size without a strategic partner. The process and execution of growing a business through franchising is so complicated and can be so costly that doing it on one’s own, while still trying to run a successful corporate location, is almost impossible. Traditionally, most new franchisors look for help in two ways: Venture Capital funding and/or Franchise Consultants.
Venture capitalists (VCs) buy equity in a company. With this new capital in the company coffers the franchisors are able to either hire employees to help with franchise legal compliance, franchise training, systems, franchise marketing and franchise sales. Or (more likely) hire franchise consultants to help them. VCs usually don’t have much experience in franchising and have little more to offer other than the needed capital.
(To learn more about how we are specifically different than traditional VCs, click here)
In contrast, franchise consultants confer with companies and help them learn what they will need to do in order to franchise a business. As stated before, the process is complex and knowing what needs to be done and in what order is not only critical to the success of the franchise, but also to ensuring the franchisor doesn't end up in jail. However, companies who use franchise consultants soon learn that most will charge up to $150,000 for consulting fees alone. The actual execution and financing of the consultant’s plan is still 100% on the shoulders of the franchisor.
(To learn more about how we are specifically different than traditional consultants, click here)
Franchise Foundry is a new kind of alignment - Franchise Development.
In most cases, when we partner with a franchise, a new franchising joint venture is created. We invest our money, time and expertise to the joint venture and receive equity in return. We help plan the strategy and take over the execution of the franchising entity’s legal compliance, systems, marketing and sales. This type of franchise development changes the game. We don’t just give money to the franchise system and hope they can find the right people to work with, and we don’t just consult with the franchisor and then leave them to do all the hard work. We are true partners and our ultimate goal as equity owners is to make the franchise system as successful as possible.
This new alignment in the franchising world is turning a lot of heads, and as a result, generating a lot of buzz. It is a daring new direction in franchise development. It requires us to put our money where our mouth is in order to be successful. It means we have to be the best and we have to partner with the best. The good news is that this new alignment works and we’re making a massive difference. By the end of the first year of being our partner in franchise development, a franchise concept has the same maturity as one 3-4 years older.
It is an exciting time to be a part of the next evolution in franchise development.