Five things successful franchises have in common
While there’s no single secret to franchise success, the best franchises often have many things in common. Whether it's their ability to maintain high standards of service or adapt to changing market conditions, some qualities are intrinsic to long-term profitability and a healthy franchise unit. Just as some characteristics regularly ensure the failure of franchises, so too are there things that repeatedly play a part in driving growth and franchise expansion. With this in mind, we take a look at five of the essential factors all successful franchises have in common.
What successful franchises need
One of the critical factors in the success of any franchise is its ability to consistently deliver high standards of service and maintain profitability over an extended period. While success can be measured over shorter timespans, the natural ebb and flow of business mean that there will be highs and lows to contend with over the years. What's really important – and an accurate determinant of success – is the ability to maintain momentum and achieve long-term financial stability.
It’s also important to consider how you measure the success of a particular franchise model. Before you sign your franchise agreement, it's first necessary to request information from the relevant franchisors and to perform independent research. Measuring success should consist of taking several different factors, such as the number of resales and buybacks that have taken place, the franchise’s growth over the years, its customer and franchisee satisfaction levels, and the total number of franchisees it has now and has had historically.
2. Translatable processes and procedures
The ability of a franchise to make their business model accessible to every new franchisee is instrumental in determining whether their new franchise units will boom or bust. An effective franchise model can be easily implemented and demonstrates adaptability to different circumstances. It provides the basic framework for growth and expansion and should be flexible enough to be applied to markets in distinctly different geographical areas. It’s also essential that the franchise provides the necessary tools to put their model’s procedures and processes in place. For instance, specialist equipment, training, or support may be needed for the franchise’s business model to function as it should.
A good way of assessing this capacity is by talking to existing franchisees about how the early stages of their setup period were handled. Did they find that the franchise model was easy to apply and translated well to their specific set of circumstances? Did they receive the guidance necessary to implement the franchise’s business model? Were they provided with a turn-key business or were they left to their own devices as they tried to establish their new business?
3. Adequate training
While the vast majority of franchises offer some level of training and support, the best franchises to open are those that provide you with everything you need to make a success of your business. This means offering specialist training in all relevant aspects of the business’ day-to-day operations, as well as marketing, business planning, and financial considerations, such as book-keeping. Some franchises may decide that some of these skills are a necessary prerequisite for becoming a franchisee and, consequently, won’t offer training in specific fields. However, this should be made clear from the start of the application process.
Just as essential as initial training, is reliable, long-term support and assistance. No new franchisee learns everything that they need to know in the first few weeks. The franchisee journey is long, arduous, and full of excellent opportunities to learn new skills and develop your abilities. There will be times when you don't have the answer and have no idea what the right course of action is. In such instances, a supportive franchisor makes all the difference.
4. Strong franchisee network
There's a lot to learn from other franchisees, and a successful franchise will typically understand and respect this fact. They might facilitate greater networking by providing a franchisee contact sheet for the entire business, or by organising conferences and seminars. They may ask more experienced franchisees to give talks, or they might buddy new franchisees with a ‘mentor,’ who has been through it all before. However, they implement it, most successful franchises will encourage peer-to-peer learning and facilitate greater sharing of resources and information.
5. Constant adaption and reinvention
A franchise is not a static organisation. To survive and thrive, it must understand that times change, and markets are always evolving. As a result, franchises need to adapt and reinvent themselves to ensure their relevance and continued success. No franchise can retain a single, unchanging organisational structure, nor allow their business model, processes, products, services to stagnate and fall behind the pace of industry change. If they do, they’re sure to suffer in future years and may find themselves struggling to attract new franchisees or satisfy their existing ones.
To find out how a franchise plans for future change, it's best to talk to the franchisor and ask them questions concerning their ability to develop their business to meet the demands of tomorrow’s markets. Look for franchises that can clearly define their business strategy going forward and that also understand what challenges are facing their particular industry. It’s no good being able to provide details of their expansion strategy if it demonstrates no awareness of where their particular industry is heading or refuses to recognise potential challenges to their continued success.
All franchises operate in their own way and display unique characteristics that make them either an attractive proposition or one to avoid. However, there are also many traits that appear time and time again in successful franchises. The five qualities listed above are essential to any successful franchise. Without them, the business will struggle to create the conditions in which franchisees can prosper, and the franchise as a whole continues to thrive.
The Editorial Team, Point Franchise ©
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