4 Elements of a Successful Franchise
There isn’t one recipe for a successful franchise, but many of the world’s biggest and most successful franchises have lots of things in common. In this article, we’re going to take you through four of the key traits of a successful franchise.
Take a look at successful franchise businesses from across the world. You might think that restaurant franchises, home care franchises and hair salon franchises have nothing in common, right? Unsurprisingly, though, there are plenty of common traits of a successful franchise that you’ll notice running through the world’s biggest franchise brands.
By analysing franchises that have stood the test of time, you can work out what you should be looking for on your hunt for the perfect franchise. Here are four key elements of a successful franchise that you should keep your eye out for when looking to invest.
1. Strong training and support
Any franchise worth investing in will make sure that you get the training and support you need to operate your business successfully. As well as the initial training programme, which will teach you how to run every element of your franchise from marketing to accounting, you should also get access to ongoing support. If a franchisor leaves you high and dry after an extensive welcome package, alarm bells should be ringing.
Even experienced business owners will need support throughout their franchising journey. Technical issues can arise with the franchise’s unique software, or there could be a worldwide crisis that throws everyone into turmoil. One of the biggest plus points of being part of a franchise is that it’s a supported route to business ownership, so your franchisor should make it easy to come to them with any issue. Whether a franchise employs a team of dedicated support staff to answer your questions, or the franchisor choose to be your point of contact, the best franchises are always there for you somehow.
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2. Clear financial projections
You shouldn’t be left guessing about the financial potential of a franchise opportunity. Any worthwhile franchise should be upfront about how much money you can make as a franchisee. Of course, previous franchisees’ financial achievements are no guarantee that you’ll make the same amount, so don’t make your decision solely on attractive numbers. But you should be able to get a clear picture of how long the average franchisee takes to see a return on their investment, and what your long-term profit potential could look like.
However, when a franchisor shares the financial performance of the franchise with you, you shouldn't just take their word for it. Make sure you verify the revenue and profit forecasts ring true with other franchisees. It’s also a good idea to run the figures by an accountant (preferably with knowledge of franchising) to make sure they look realistic.
Investing in a new franchise? You need to make sure your franchisor has a strong business plan and see evidence the concept has been financially rewarding for them over a number of years. If you’re going to make a substantial investment in a franchise, you need to be as sure as you can that it’s going to pay off. You can find out more about the economics of running your own business here.
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3. Clear brand identity
One of the biggest plus points of a franchise is some of the hardest parts of business development have already been done, like creating a strong brand identity. Successful franchises like Subway, Dunkin’ Donuts and Las Iguanas are quickly recognised by both new and existing customers, as each location shares similar decor, branding and messaging throughout. For independent business owners, building up a customer base and encouraging repeat custom can take significant time, effort and money.
When you become part of a well-known franchise brand, you’ll practically have recognition and loyal customers from the minute you sign your franchise contract. This level of brand awareness has a considerable influence on the success you're able to achieve as a franchisee. Even if a franchise is relatively young and only has a few locations, a strong brand identity will help set you apart from competitors and show customers why they should take a chance on you.
A takeaway franchise that doesn’t look or feel any different to every other high street chicken shop will make it harder for you to grab people’s interest and their hard-earned cash. Try and look at the franchise’s that interest you from the perspective of a customer – does it look like somewhere that you’d spend your money? And if you can’t think of a good reason why you wouldn’t (for example, if you’re looking at a mobility shop franchise as a young, able bodied person) then it might be wise to look elsewhere. If you’re a franchisor, find out more about how to manage your brand here.
4. Consistent products or services
It goes without saying that you should genuinely think the products/services your potential franchise provides are good. However, another thing you’ll notice about a successful franchise is there’s a high level of consistency across all of its locations. (We’ve previously written about why brand consistency is so important). Enter any McDonalds in your country and you’ll find exactly the same products produced to the same tasty recipes. Similarly, if you call a Metro Rod engineer, you can expect the same quality of service every time. Of course, there might be regional variations to cater to different international markets, but the core offering of a great franchise remains consistent across every location.
If your chosen franchise has great reviews in one part of the country, but terrible reviews in another, you need to find out why. Perhaps a bad franchisee slipped through the net, or there isn’t such a strong market in different cities. However, it can indicate that your franchisor isn’t providing enough support or robust guidelines that make it easy for franchisees to offer a consistently great service.
A formula for success
Of course, this isn’t an exhaustive list of the qualities you’ll find in a successful franchise. Some have done so well because they’ve bucked the traditional franchising formula, while younger franchises may not have had time to build up such a strong brand. The most important takeaway is that a worthwhile franchise shows you clear evidence that it’s a strong business concept, which has a really good chance of bringing you personal and financial rewards. We’ve got plenty of excellent franchise opportunities on Point Franchise ¬– check out our UK franchise directory to find the right one for you.
Sophie Cole, Point Franchise ©
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