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Franchising has grown in popularity within the education industry. Franchising is a method of business expansion. It involves business owners giving others (franchisees) rights to operate units of business that use the name, business model and trademarks of their franchised brand. Franchisees may exclusively sell the brand’s products and services. This article explores the franchising process, highlighting key considerations specifically for education businesses.
The Franchising Essentials
1. Consider Whether Your Business Is Franchiseable
A business will have the best chance of success under the franchising model if it possesses particular qualities. These include:
- a history of good profitability;
- a replicable business model; and
- market demand elsewhere.
You should assess each of these elements before franchising. First, look inward at your business and evaluate if it has been operating profitably. Prospective franchisees are more likely to be attracted to a highly profitable business opportunity. Also, consider whether franchisees can easily replicate the business model. If a business model is uncomplicated, it is more easily replicable. It should be possible for you to train others to operate a business that follows the systems and processes of your own.
Once you have looked at your business closely, look outward at its potential scalability into new areas. Consider whether there is market demand for your education service elsewhere. If so, you may have a franchiseable business.
2. The Franchise Agreement
Education franchising describes a broad range of businesses. These include anything from tutoring services to day nurseries. However, one aspect that unites all education businesses is you must have a franchise agreement in order to franchise them.
The franchise agreement is the contract you will share with franchisees. It is the bedrock of any franchise relationship. This document outlines all conditions of the agreement, including:
- its duration;
- renewal and termination clauses; and
- the roles and responsibilities of both you and the franchisee.
This handbook covers all the essential topics you need to know about franchising your business.
3. Develop the Training Package
It is a franchisor’s responsibility to train and support franchisees. At the start of a franchisee’s journey, you will provide training and equip them to run a business using the systems and processes of your franchised brand.
A robust training package is essential for a successful franchise. As a franchisor, you want franchisees to be clear about their role and how their business should operate. Comprehensive franchisee training is vital as education businesses thrive on specific processes and teaching procedures. Uniformity and high standards are essential for a good customer experience.
A detailed franchise operations manual is another vital element of a successful training program. This is a guide you will provide to franchisees when you onboard them. It details everything a franchisee could need to know about the business. It can act as a training document and a support mechanism. Franchisees can return to this document to clarify aspects they are unsure about.
4. Seek Professional Advice
Seeking legal advice from an experienced lawyer can help you prevent risk and ensure a smooth start to your franchising journey. A lawyer can review drafts of the franchise agreement, or you may ask them to draft it for you. A robust franchise agreement can help you avoid costly legal disputes further down the line.
You may also seek advice from other professionals, such as a business advisor versed in the education industry or an accountant.
Further Considerations With an Education Franchise
Industry Regulations
Depending on the type of business you run and the people your franchisees will work with, you may have further regulatory considerations to consider. These might include:
- safeguarding requirements;
- specific qualifications; and
- particular accreditation to be able to offer qualifications to students.
You should seek advice on anything you need clarification on.
Recruitment: The Final Step
The final step to franchising any business is to advertise franchise opportunities and recruit franchisees. When you enter this process, have an idea of the type of candidate you aim to attract. Your business is education-based, so you will likely need more time to vet candidates and conduct thorough background checks. These checks are vital if prospective franchisees will work with young or vulnerable people.
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Key Takeaways
To franchise any business, you should do the following:
- consider whether the business is franchisable;
- draft a robust franchise agreement;
- develop a comprehensive training package (including a franchise operations manual); and
- seek legal advice.
As the business is education-based, you may also need to consider aspects such as:
- safeguarding;
- tutor qualifications;
- whether franchisees can offer specific qualifications to students; and
- background checks.
If you need legal assistance franchising an education business, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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