Qualities of the best franchisees
While there’s no single secret to franchise success, the best franchisees often have many things in common. Whether it's an ability to maintain high standards of service or adapt to changing market conditions, some qualities are closely linked to long-term profitability. Just as some characteristics regularly result in the failure of franchises, there are also attributes that repeatedly play a part in driving growth. With this in mind, we take a look at five essential factors all successful franchisees have in common.
1. A knack for developing consistency
One of the critical factors in the success of any franchisee is their 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 means 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.
Franchises also try to enforce consistency across their network. The reputation of the brand depends upon all its franchisees upholding high standards. If one location delivers substandard services or damaged products, for example, it risks damaging the profits of the entire franchise, as all will be tarred with the same brush.
Therefore, if you want to invest in a high-performing franchise, you should look over its history before you sign a franchise agreement. This involves requesting information from the relevant franchisors and performing independent research. Make a note of the franchise’s growth, its customer and franchisee satisfaction levels, the number of resales and buybacks that have taken place, and the number of franchisees it has had over the years. A high franchisee turnover rate indicates dissatisfaction among business partners. Therefore, you’re more likely to find an ethical and consistently profitable franchise if you discount businesses that has resold a high number of units.
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2. The ability to take on established business processes and procedures
When a business owner turns their company into a franchise, they have to make their business model accessible to every new franchisee. The adaptability of the operational strategies is instrumental in determining whether the new franchise units will boom or go bust.
An effective franchise model can be easily implemented in a number of different locations and managed by other entrepreneurs. 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 franchisor provides the necessary tools to put their model’s procedures and processes in place. This might mean providing specialist equipment, training or support, so that the franchise’s business model can function as it should.
There are two ways to make sure you’re as prepared as you can be when you become a franchisee:
- Firstly, you need to be sure that you have the right personality for franchising. Taking on someone else’s business model and adhering to operational strategies takes patience and understanding. If you find it difficult to follow instructions or like to have creative control over your work, franchising probably isn’t for you. On the other hand, you might appreciate the support of an experienced franchisor and the benefits of having a brand identity, suppliers and other key business factors already in place. If this is the case, franchising could offer you the opportunity you’ve been waiting for.
- It is your responsibility to choose a franchise that you believe will work for you. You’ll need to be confident, have the abilities required to carry out any specific tasks, but also that the business model will work well in your desired location. Franchisors should have made sure that their business was ‘franchiseable’ – in other words, viable and adaptable – before they launched the network and recruited franchisees, but you may find that some businesses will work better in your location than others. If you want to get the most out of franchising as possible, you should take the time to consider how well the business model can be translated.
Talking to existing franchisees is a great way of assessing how adaptable a business is. Consider getting in touch with them and asking them about their experience. Did they find that the business model was easy to recreate? Did it translate 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. A willingness to learn
While the vast majority of franchises offer some level of training and support, the best franchises 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 franchisors may decide that some of these skills are a necessary prerequisite for becoming a franchisee and, consequently, won’t offer training in them. However, this should be made clear from the start of the application process.
Most franchises also offer ongoing support and advice to all franchisees. No new recruit learns everything they need to know during the initial training programme, so this supplementary guidance is invaluable.
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. Take this opportunity to develop your skills and knowledge; your franchisor has expertise you wouldn’t be able to access if you were setting up an independent business from scratch. You never know, their useful tips and guidance might have a huge impact on the profitability of your unit.
4. A team spirit
There's a lot to learn from other franchisees and a successful franchise will typically understand and respect this. They might facilitate networking by providing a franchisee contact sheet for the entire business or buddy new franchisees with a ‘mentor’ who has been through it all before. They may ask more experienced franchisees to give talks or organise conferences and seminars. However they implement it, most successful franchisors will encourage peer-to-peer learning and the sharing of resources and information.
If you’re to make the most of the opportunity you have, you’ll take every chance to meet and mingle with other franchisees. Don’t underestimate the positive effect this can have, both on your business and you own wellbeing. By sharing any problems you’ve faced with fellow franchisees, and gaining the advice and reassurance they’ll often provide, you’ll have new energy to continue confidently growing your business.
5. An eye for reinvention
Franchises are not static organisations. To survive and thrive, they must understand that times change and markets are always evolving. As a result, franchises need to adapt and reinvent themselves to ensure they stay relevant and continue seeing success. No franchise can retain one unchanging organisational structure. If they do, it’s likely that their business model, processes, products and services will stagnate and fall behind the pace of industry change. As a result, they’re sure to suffer in the future and may find themselves struggling to attract new franchisees or satisfy existing ones.
When you’re looking at franchise opportunities, try to establish how a franchise plans for future change. To do this, you’ll need to talk to the franchisor. Ask them questions and use the answers to judge their ability to develop their business to meet the demands of tomorrow’s markets.
Search for franchisors who can clearly define their business strategy going forward and who 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 potential challenges to their profitability or where their particular industry is heading.
Once you’ve selected a forward-thinking franchise and built your business unit, you should constantly be looking out for ways to develop your business. For example, you might identify ways to embrace trends or safeguard the branch against economic uncertainty. Of course, you’ll need to approach your franchise with any changes you’d like to make, as they’ll need to approve them before you implement them. But keeping an eye out will benefit you hugely as the years go by.
All franchises operate in their own way and display unique characteristics that make them either an attractive proposition for franchisees or one to avoid. However, there are also many traits that appear time and time again in successful franchisees. The five qualities listed above are central to any successful franchise. Without them, the business will struggle to maintain profitability over time, and may even have a negative impact on the franchise as a whole.
Alice Tuffery, Point Franchise ©
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