All franchisors will undoubtedly have ambitions to scale their business, having selected and invested in franchising as a strategy to increase their brand reach and permeate new locations. The idea of reaching new markets and audiences, expanding into new cities and countries and increasing revenue and profits at the same time is both incredibly attractive and exciting. However, not all franchisors will achieve their goal – and that’s not simply because they haven’t put in the hours and the effort.
For any franchise brand to scale successfully, solid foundations must be put into place at an early stage in the franchising journey. Of course changes, adjustments and improvements will be an inevitable and necessary part of the brand growth as a franchise network expands. But with the proper structure, processes and procedures in place at the start, the process of scaling the business will not simply be easier but will enable the franchisor to concentrate their efforts on moving the franchise brand forward and on recruitment and growth, rather than firefighting difficult situations and negotiating hiccups and bigger challenges. Focus on the solid construction of these six key pillars and they will support the successful scaling up the business and help the franchisor realise their growth goals.
Core Offering
Central to the success of any successful franchise brand is its core product or service. It goes without saying therefore that this needs to be nailed on and nailed down. For a franchise to have real growth potential, the core offering of the business needs to have appeal not just in one narrow geographical area but to have the ability to attract a broader audience across multiple locations, and it must have longevity and lifespan. Production processes and supply chains should be established, tried and tested so that new franchisees can quickly and easily come and board and become operational within a short time frame.
Correct Pricing
A franchisor has a duty to ensure that the brand and the business model are financially sound. The franchise package must be priced correctly to ensure that it covers all of the franchisor’s costs in setting up a new franchise location and all of the support that the new franchisee will require. Royalty fees and other levies need to be carefully considered and the overall price of the franchise should reflect the brand positioning and place in the marketplace. It needs to be competitive to attract new investors to the brand but also to be priced to ensure overall profitability, so that investment in growth can be sustained.
Identified ideal franchisee persona
A franchise brand’s success depends on the success of its franchise network. It is crucial therefore for a franchisor to make wise recruitment decisions at every stage of the franchise journey, but especially so in the early days. Those first franchisees should become role models and ambassadors for the brand, going on then to attract the next generation of franchisees into the business. Drawing up an ideal franchisee persona – a set of criteria against which to match prospective franchisees such as relevant prior experience, personality traits, drivers and any other identifiable qualities – will enable the franchisor to identify the type of person who will be a great fit for the brand, help them to direct marketing and recruitment activity into the right arenas, and crucially to avoid poor recruitment decisions which can potentially consume a lot of time and energy as well as being damaging to the brand.
Positive franchise culture
I’ve previously written about the importance of open and honest communication between franchisor and franchisee and how a positive culture within a franchise network is one of the cornerstones for franchise success. Happy and engaged franchisees will become a franchise brand’s biggest asset and an invaluable recruitment tool as the business scales. Spending time at the outset to ensure that the brand values are clear and well defined, are communicated to franchisees and engrained in all aspects of the business will ensure that those values and what makes the brand stand apart are not lost in the growth journey. Ensuring that there are avenues, means and opportunities for franchisees to be both heard and listened to and that they feel able to approach the franchisor and operational team with difficulties and challenges that they are experiencing is crucial.
Franchisee training and support
Inevitably, as a franchise brand and the network size grows, how franchisee training and support programmes are delivered will change over time. But ensuring that franchisees are both comprehensively trained and supported throughout their business journey should be at the very heart of operations. It’s also important that franchisees are themselves supported to scale their businesses, so that they continue to feel motivated and keep their businesses moving forwards, so inspiring the next intake of franchisees to the network and beyond.
Customer service
Keeping the franchisees happy and engaged is crucial to franchise scale-up success. But equally important is keeping the brand’s customers happy too – without them there would be no business! Before scaling, a franchisor should ensure that the customer service standards and expectations are clearly defined and that all franchisees are fully trained and regularly monitored to ensure that the customer service standards are being maintained. Get this right, and a loyal customer base can become the very best unpaid sales force, spreading the word about the brand to both new audiences and potential investors and making the scale-up journey a much easier one.
With these six pillars in place, a franchisor will be setting out on their scaling-up journey in a strong position indeed. But there is one caveat – pace. A mistake that many franchisors will make is to expand too quickly and overstretch themselves and their resources. This can result in many potential dangers and damage to the brand, including new franchisees feeling unsupported at a crucial stage in their business venture and a franchisor’s inability to oversee and monitor quality in new locations properly. A considered, strategic and sustainable approach to growth will reap long term rewards.
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