10 Steps to Creating your Multi-Location Custom Build Shops

Custom build shops are built on the creativity, project management, and technical building skills of a few select individuals. As the founder of the business, you create the designs and supervise the builds from start to finish, and provide significant input and hands-on assistance in the project, even if you’re managing a team of people. You may have started as an individual or pair of people with a vision for custom cars and trucks, but you’ve seen the company grow. You employ a number of highly talented craftsmen and women to support your builds.

The demand for your builds is potentially nation-wide. You’re able to serve those customers through flights and logistics to make sure the cars you’re working on get to your shop. Your brand could even be known internationally. Despite coming up with a solution to satisfy that demand, I’d like to ask you – how much bigger could you be? How much bigger do you want to be? What is your long-term business strategy?

There are several options available for you to grow:

· In-house product development for online selling

· Franchise your single location into multiple with new investors

· License your brand to create steady income for little effort

· Expand to a larger facility, hire more staff, and grow your local operations

Products and local expansion are typically the simpler options to create growth in your business. Consider whether either of these options are in line with your long-term business strategy. If you’re looking for help developing that strategy, Driven Performance Advisors can help.

If your strategy involves creating a significantly larger brand presence, the franchising and licensing options are most desirable. Here is your formula for success in expanding your custom build shop to multiple locations.

Franchise or License

First, figure out which path is the right one to take.

Is your brand known for truly unique, special builds with an identifiable style? Franchise.

Do you do a higher volume of aftermarket part installation and basic modifications? License.

Do you do both? Consider whether your expansion will include both parts of the business. If not, select the option that makes sense. If so, go with franchising, the more involved option.

Franchise Formula

If you are taking the route of expanding your capabilities to a higher level of one-off build output, you cannot compromise the quality, style, and creativity you’re known for. Franchising will allow you more control over subsidiaries of your business. This is the formula for your franchising strategy.

1. Establish the strategy of opening new franchising locations and the objectives you’re aiming to achieve

2. Determine the intellectual property included in the franchise package

3. Rigorously document the intellectual property into manuals, memos, and procedures

4. Define exact nature of operations and output of franchise locations

5. Establish upfront and ongoing franchise pricing

6. Release marketing for franchise partners

7. Vet and select a franchise partner candidate

8. Ensure franchise location has incredibly strong leadership who understands your strategy and brand

9. Invest 6-12 months in training and working in both locations to get the franchise location up to speed – use training methodology of Teach, Demonstrate, Observe

10. Step back, provide ongoing oversight and creative input

License Formula

The formula for licensing your brand to new locations and business partners is not massively different from franchising, but does come with slightly different considerations when going through the set up phase. Your brand is known for a service more than a product, and those services are likely easier to replicate than custom, uniquely designed products. As a result, your upfront investment is lower and your long-term earnings are more secure. While earnings are more secure, your overall long-term commitment is much lower.

1. Establish the strategy of licensing the brand and the objectives you’re aiming to achieve

2. Determine the standards that licensees must adhere to in order to represent the brand

3. Ensure your key business partners are willing to support licensed locations

4. Write business plan for licensees that lays out operations and services provided – not as detailed as franchisee intellectual property to allow for liberties of licensing

5. Establish license pricing

6. Open new website page dedicated to licensing opportunities, accumulate candidates

7. Select licensing partners based on alignment with brand, entrepreneurial initiative, and leadership abilities

8. Establish brand terms of use on a partner-by-partner basis based on the strengths of each licensee

9. Determine how the brand will be represented through new licensee – separate geographical website, diversification, or something else

10. Monitor licensees, ensure they’re in line with the brand, and sit back and collect fees to augment your own investments and income

In Conclusion

Whatever strategy for growth you choose, taking all important steps for planning, clarification, and execution will ensure your greatest chances for success.

If you want to talk about options for franchising or licensing to make progress on your company’s strategy, reach out to Driven Performance Advisors at arun@drivenperformanceadvisors.com.


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