BDC Executive Group March 2024: Why Franchising is a People Business

BDC Strategy executive group

At our BDC Executive Group March meeting the topic of recruitment and more specifically re-
sales of existing units were discussed in detail. Led by David Lindsay, Director of BDC Franchise Recruitment at BDC Partners, the conversation pivoted around Why Franchising is a People Business. Below are the observations and key talking points.

In the world of franchising, success is not solely determined by the strength of the brand, or
the allure of the products or services offered. Instead, it’s the people—the franchisees—who
are the driving force behind a franchise’s triumph or downfall. Franchising is undeniably a
people business, and without the right individuals onboard, even the most promising brands
can falter.

As franchisors we more than often dedicate significant resources to expanding our network,
focusing primarily on recruiting new franchisees to open additional locations. While
expansion is vital for growth, it’s equally essential to recognise the critical role that existing
franchisees play in the ongoing success of the brand. This is where the often-overlooked
aspect of resales comes into play.

Resales are integral to maintaining the health and stability of a franchise system. Yet, as
franchisors we can frequently overlook resales in our recruitment strategies, placing more
emphasis on acquiring new sites. However, understanding the importance of resales is
paramount for sustained growth and the longevity of the brand.

As Franchisors one crucial question we should ask ourselves is: “Do we make it easy for our
franchisees to sell their business?” Facilitating smooth transitions in ownership is not only
beneficial for outgoing franchisees but also for the overall health of the franchise system.
Franchisees looking to exit the business should feel supported and empowered throughout
the resale process.

Implementing streamlined systems and processes for resales is imperative. Franchisors
should develop comprehensive guidelines and resources to guide both sellers and buyers
through the transaction. Clear documentation outlining the steps involved, legal
requirements and timelines can mitigate confusion and minimise potential disruptions to
business operations.

Equally important is ensuring that franchisees are aware of these systems and processes.
Effective communication is key. Franchisors need to proactively educate their franchise
network about the resale process, keeping this information readily accessible and regularly
updated. Providing training sessions or resources specifically focused on resale best
practices can empower franchisees to navigate the process confidently.

Moreover, franchisors should actively support franchisees in preparing their businesses for
resale. Offering guidance on enhancing marketability, optimising financial performance, and
addressing any operational concerns can increase the attractiveness of the franchise unit to
potential buyers.

Recognising the significance of resales and investing in the necessary infrastructure to
support them can yield numerous benefits for franchisors. Not only does it foster a sense of
trust and loyalty among existing franchisees, but it also enhances the overall stability and
attractiveness of the franchise system to prospective investors.

In wrapping up the morning franchising we left with a stronger understanding of how the
success of a franchise brand hinges not only on its products or services but also on the
individuals who operate its units. While expansion is essential, franchisors must prioritise
resales and invest in systems, processes, and communication strategies to facilitate smooth

transitions in ownership. By recognising and embracing the importance of resales, we as
franchisors can ensure the ongoing success and growth of our brand in the competitive
landscape of franchising.

At our next Executive meeting, to be held on the 14th of May, Jane Garber-Rosenzweig,
Managing Director BDC Law, will be leading our session focusing on what is happening in
the current Franchise legal landscape. One topic to be covered will be Unfair contract terms.

Thinking about joining BDC Strategies Executive Group? Learn more here or enquire now!

About the author

Share the post

success is connected

Catch up for a coffee (or a beer)?

Industry insights
straight to your inbox

Join the BDC community!