A profitable franchise doesn’t just come into being overnight; for an investment opportunity to do well, it needs a dedicated, passionate entrepreneur leading the way. So, what makes a successful franchise owner? Let’s find out.
Although a franchisor’s role involves a huge range of different tasks and responsibilities, the job can be broken down into four main categories. If you’re wondering whether you have the right skills to develop a successful franchise, keep reading.
What are the characteristics of a successful franchise owner?
When you become a franchisor, you’ll take on many roles. But none will be as important as leading and motivating your franchisees so they can help nurture franchise growth and create successful businesses themselves.
Strong leadership can turn a business idea into franchise success, and your brand is bound to suffer if you lack the necessary management skills.
If you don’t know whether you have what it takes to lead a successful franchise, perform a self-assessment and be honest with yourself about your existing skillset. If you don’t think you have the right characteristics, you could consider ways to improve your abilities. You’ll need:
- Vision - Inspirational leaders look past the ‘here and now’ to visualise a future and develop a plan the entire network will appreciate.
- Expertise - Franchisors who are extremely knowledgeable about running a franchise are better placed to be effective leaders. They know the challenges their employees may face and can help them overcome any obstacles.
- Communication skills - Leaders not only communicate openly and honestly, but listen too. They take on board feedback from their franchisees and are willing to make changes based on their ideas, opinions and concerns.
- Respect - Strong leaders know that the way they treat their franchisees influences how they, in turn, treat customers. If you nurture a culture of respect, openness and mutual trust, franchisees should feel valued and have a sense of job satisfaction.
>> Read more:
- 5 Qualities of a Successful Franchisor
- 4 Things Franchisees Never Have Time for But Are Essential for Running a Successful Business
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- 4 Elements of a Successful Franchise
- How to Start a New Business on a Shoe-String Budget
- The Ultimate Guide to Franchising Success
Your leadership style as a franchisor has the potential to significantly impact your level of franchise success, so take ownership of it and become the best boss you can be.
2. Money mastery
Cash flow management is one of the toughest aspects of running your own business. So it will come as no surprise that it is also one of the most common factors behind franchise failure.
You’ll need working capital to keep your franchise afloat in its early days, and it’s vital you know how to build up your profits. Here are some tips on how to manage your cash flow effectively:
- Create forecasts - Do some research to get an idea of a typical cash flow forecast for a business like yours. Use it as a guide and regularly update your projections so you have an effective plan for the next three, six and 12 months. Then, you should be able to identify and resolve any issues before they get out of control.
- Save when you can - In all likelihood, there will be months when your outgoings are higher than your incomings, particularly when you first set out. So, when your franchise is performing well, put some money aside to cover your expenses for the months when cash flow becomes a concern.
- Spend your money wisely - Although it’s important to save, you also need to spend money to make money. Make sure you give your franchisees the best chance at franchise success by investing in high-quality training schemes and boosting your brand’s customer awareness levels with national marketing campaigns.
3. Marketing know-how
As a franchisor, you must take care of your business’s brand-level marketing, while your franchisees promote their individual units locally. To do the job well, you’ll need to carry out regular market research, so you know how to advertise your brand efficiently.
Here are some ways you can drive customer engagement:
- Create a customer database - Adding value for your customers is a great way to encourage repeat business. If you collect email addresses at the point of sale, you can regularly email your customers with relevant news stories and information. By adding this ‘extra’ free service for your following, you’ll increase your chances of enticing customers back.
- Focus on your brand - By creating a distinctive brand, you’ll drive regional and even national recognition for your franchise among customers. Pay attention to your logo, the visuals you use and the way you write to help create customer loyalty, whether they’re visiting a franchise in London or Liverpool.
- Look for PR opportunities - Writing articles, making comments for the press and getting involved in different events are all ways to build awareness for your franchise. As the franchisor, you need to show the world you’re the expert, so make sure everything you say is well thought out.
>> Read more:
- Franchising 101: The Complete Guide to Franchise Costs in the UK
- Franchising 101: How to Buy a Franchise Business in 10 Steps
- Franchising 101: The Official Franchise Start Up Checklist (Part 1)
- Franchising 101: Top 5 Qualities of a Franchisee
- Franchising 101: 6 Tips for Building Customer Loyalty Through Marketing
- Franchising 101: The Pros and Cons of Franchising Your Business
- Franchising 101: 6 Top Contributors of Franchise Failure
4. Attention to detail
All business owners need to be on the ball. But franchisors in particular must be able to nip problems in the bud before they escalate - not only for the sake of their brand, but their franchisees too. So, attention to detail is crucial for franchise success.
Here are some of the areas you’ll need to focus on:
- The operations manual - This in-depth document forms the basis for your franchisee and employee training schemes and is an initial reference point for anyone in the network who has a question or concern. It must be thorough, covering every aspect of running a franchise unit under your brand.
- General network operations - You’ll need to be able to oversee the running of the entire franchise, and pick up on problems before they get out of hand.
- Franchisee wellbeing - Franchisees may not immediately trouble you if they start to struggle. So, you should be able to identify problems early and develop a plan to help them get back on their feet.
- Market conditions - You may have developed a winning formula for franchise success, but you’ll need to keep an eye on industry trends if your business is to stay profitable. Carry out market research and analyse your competitors; this way, you can work out how to develop your business over time.
More guidance on running a successful franchise
Our franchise guides are packed full of useful ideas and advice for aspiring and current franchisors. Use the search bar to find our Franchisor Tips series or take a look at our recent publications.
Alice Tuffery, Point Franchise ©