How to succeed as a young franchisor
Lessons from a local franchisor who launched a multi-million-rand global business in under five years.
Franchising is often promoted to young aspiring entrepreneurs, whose financial constraints and lack of business acumen would otherwise make them unable to launch a business. But while becoming a franchisee is a great entry-level entrepreneurship strategy, you don’t need someone else’s successful business idea to launch a profitable, replicable business. Start your own and multiply your own success.
Just ask Bertus Albertse. At 24, while still in university, he launched his Electro Muscle Stimulation (EMS) business, Body20, and franchised it a year later. It wasn’t simple to switch from being a thriving business owner to a first-time franchisor, and he had to learn how to franchise a business quickly: “Franchising means running a much bigger system, with much bigger needs. I had to learn that I can’t control every single thing. I needed to adapt and change and be what the business needed me to be.”
Body20 has since gone global, with three franchises in the state of Florida, USA, as of 2018. Here’s how Albertse has achieved success in a niche market as a young franchisor:
1. Thrive on service in a niche market
When Albertse launched Body20, he knew that he wasn’t the only EMS technology service business in the market, so he had to find a key differentiator to succeed in building his brand.
“There’s no exclusivity,” Bertus explains. “There are multiple tech providers available, and no one holds patents. There were also already competitors in the market, so I knew this wasn’t my competitive advantage.”
This encouraged Albertse to differentiate his business on something he knew all his clients would appreciate over exclusivity: service. And it worked. His passion and success were alluring, and soon clients were asking how they could do the same.
2. Turn your customers into franchisees
Body20’s rapid success is largely due to his franchisees understanding their business, being excited about it and putting in the work to multiply their business success. His service also works well enough for people to take it seriously as a viable business option.
“Virtually every franchisee started off as a Body20 client,” says Albertse. The idea to franchise took shape barely a year after he’d launched his business when he realised that franchising was an opportunity to scale the business. It was foreign territory for him, so he had to learn the ropes fast to give his brand and all these new business owners a chance to succeed.
3. Understand the transition
“The most interesting lesson I learnt is that being a franchisor is completely different. It requires a different business model compared to running your own solo business,” he says. “You can go to a franchise attorney to draw up your franchise agreement, but that doesn’t tell you how to operationally run your franchise.”
Switching roles from an independent business owner to a franchisor means learning to support other people in their businesses. You need to set up an operational infrastructure to help your franchisees match your own success. It may be daunting when you don’t even know what they need yet, but as Albertse puts it, “It’s almost like you need to jump in. In entrepreneurship, you only get clarity through action.”
4. You don’t need to be responsible for everything
While becoming a first-time franchisor definitely adds to your responsibilities, it's worth remembering that you’re in it together with the rest of your team. Ensure that owners know there are variables and that they need to understand the inherent risk of those variables, advises Albertse. “Whereas I used to carry all risk and responsibility for those variables, it’s no longer in my control. Once you realise you’re not responsible for each franchisee, what happens in return is that those people reinvest in you as a person,” he says.
This reinvestment could be in the form of multi-unit franchisees realising their ability to take on more stores, or shared knowledge from your business network on business operations.
Key takeaways
- Customer service is a key differentiator when your product or service isn’t exclusive
- The best candidates for franchisees are customers who believe in the success of your business idea and its profitability
- Understand the challenges of becoming a franchisor after operating as an independent business owner
- Share the load with your franchisees and explain everyone’s role in the business’ success