Drive Scout Blog
Are you ready to franchise your driving school?
By: Drive Scout | Posted in: Expansion
April 20, 2017
You’re a rock star! Can you be a driving school franchise star too?
You did everything right and the money started rolling in. The road to success may have been a bit bumpy during the journey, but your driving school is doing great and turning a profit.
As an owner myself, I offer my warmest congratulations. I know that many schools fail. However, many – like yours, succeed.
So now that your driving school has discovered the formula for success, what’s next?
Should you open a few more locations? Or are you ready to franchise your driving school?
A franchisor provides a licensed privilege to the franchisee to do business. The franchisor aids in organizing, training, merchandising, marketing and managing in return for monetary consideration. Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees).
Entrepreneurs who have developed a successful business often wonder if they should look to franchising as an option to expand their operations. Yes, you could open 1,2,3 or more new locations and expand your driving school that route.
But, wouldn’t it be easier to grow your successful business model through franchising? It may seem enticing, but there are both benefits and drawbacks.
Ask the Right Questions
The first step is to determine if your driving school is ready to franchise. Before proceeding, it’s imperative to analyze your business thoroughly.
This is the time to look in the mirror and be completely honest with yourself. Sometimes, we don’t always like what we see in the reflection.
Here are a few questions you need to ask yourself…
- Are you passionate, success driven and patient?
- Do you wake up every morning and look forward to heading in to the office?
- Are you all willing to go that extra mile to succeed? Franchising success doesn’t happen overnight, so you also must be patient and willing to ride out the highs and lows.
Is your business profitable?
This may seem like a silly question. If you weren’t successful, you wouldn’t even consider franchising, right? The truth is that many driving school owners don’t know their true numbers.
For every dollar in sales, how much goes towards operating expenses? If you don’t have a grasp on these critical numbers, it’s not time to start a driving school franchise. For more advice on how to increase profits at your driving school, click here.
Do you have a successful track record?
Just because your business is profitable for “you,” it doesn’t necessarily mean it will be for franchisees. Is there enough “meat on the bone” to entice a potential franchisee?
Franchising is a growth method that helps you expand your driving school with a low capital investment. This can only come after you have established a successful reputation and a level of measurable success.
Is your business replicable?
Do you have procedures in place? Can you document and teach your operations? Before even thinking about franchising, you need to have strong Standard Operation Procedures in place and documented. Think “rinse and repeat.” Can someone else replicate your success?
Do you have a Unique Selling Proposition (USP)?
As a new franchisor, you need to offer something unique to potential franchisees. All driving schools are not created equal.
What is your USP? Do you leverage technology and the latest teaching methods? Is your fleet eco-friendly? Standing out from the crowd is essential.
Do you have the capital for franchising?
Although franchising is an expansion route that requires a lower capital investment, you’ll still need funds for manuals, training, recruitment, and legal fees.
Do you need trademarks and patents?
It’s important to ensure that you have registered all the relevant trademarks and patents before embarking down the road to franchising.
If you answered “yes” to the questions above, then you might be ready to franchise your driving school.
Give yourself a high five. You’re eager to share your success by opening new franchise locations.
Yes, franchising can lead to growth, but it’s not an automatic ticket to success. However, when the right concept is franchised effectively, it can be a great expansion strategy.
So, what are the next steps?
Here are some suggestions from Entrepreneur.com.
Conduct market research. Don’t rely on a gut feeling that your driving school would be a smash hit across the country. Gather market research to confirm there is widespread consumer demand beyond your home city and room in the marketplace for a new competitor.
Prepare for change. Becoming a franchisor means you’ll be engaged in entirely different activities than you were as a business owner. You’ll primarily be selling franchises and supporting franchisees, instead of selling classes and teaching students.
Learn the legal requirements. To legally sell franchises anywhere in the United States, your business must complete and successfully register a Franchise Disclosure Document with the Federal Trade Commission.
In the FDD, you’ll be asked to provide a wide range of information about your business, including audited financial statements, an operating manual for franchisees, and descriptions of the management team’s business experience.
To get through the lengthy and complex process, you may want to hire a franchise consultant or attorney, or you can do it yourself with a Franchise Now toolkit.
As you prepare your legal paperwork, you’ll need to make decisions about how you will operate as a franchisor.
Key points include:
- franchise fee and royalty percentage
- term of your franchise agreement
- size territory you will award
- type and length of your training program.
Once you’ve made the important decisions that shape how your driving school franchise will operate, you’re ready to complete your legal paperwork. When you submit it, be prepared for authorities to critique the document and possibly demand additional disclosures before they approve your application.
As you prepare to become a franchisor, you’ll usually need to add several staff members who will focus solely on helping franchisees. Once you’re in business as a franchisor, one of your most pressing activities will be to find franchisees and convince them to buy your concept. A new franchise chain succeeds or fails at this point, depending on the amount of franchisee support they provide. This is also when you’ll need to start marketing efforts to drive sales to the franchisees.
How to become a franchisee of an existing driving school?
Does all this sound too complex and overwhelming?
Another route is to buy a driving school franchise of an existing business that offers this option. The below driving schools in the United States offer franchising opportunities to franchisees.
911 Driving School, based in Washington state has been in business for 15 years and offers a franchise for a total investment of $85,900-$190,100. It has brick and mortar locations in five states, is run by police officers, and has trained 100,000+ new drivers.
Fresh Green Light is another driving school that offers franchises. The financial investment to open a Fresh Green Light franchise is $111,200-$187,500. In return for your investment, franchisees will receive help with site planning, operations, curriculum, training, and marketing.
All Star Driver Education has been family owned for three generations. It offers franchises for an investment of $94,000-$153,000. In return, franchisees receive all the tools, support and training to succeed.
Safeway Driving is looking for strategic partners to grow in Texas. SafeWay Driving franchises are awarded by School Zones. School Zones are ranked according to state projected attendance figures and calculated on a “per car” basis.