The Franchise Success Formula

It's not often you'll hear me saying that I have some sympathy for franchisors, but I do.

The really good franchisor has to be multi skilled to build and run a successful franchise business.

They need to be both a master at their own business and a brilliant franchisor at the same time. Many of them come to franchising having built up a successful business which they now wish to expand through franchising. The problem is that while they totally understand their business, they don't understand what it takes to be a great franchisor. This skills gap will cause problems unless the franchisor acquires new skills or strengthens their team to bring on board others to fill the gap.

The excellent book, "Street Smart Franchising, 2/e" by Mathews, DeBolt and Pervical, which I refer to often, suggests that a prospective franchisee needs to evaluate not just the franchise business, but also the franchisor as a viable franchisor. They suggest that a franchisor needs to be brilliant in the following key areas:

  1. Creating a unique product or service offering. The products and services that franchisees offer their customers are unique to their company and can't easily be copied or replicated by competition. New and existing customers understand and see value in the offering and aren't likely to cut out their expenditures in cost-saving moves. Lastly, these products or services offer franchisees a sustainable long term advantage over their competition and are not in danger of being obsolete, replaced, trumped, or outsourced in the foreseeable future.

  2. Sales and marketing. The franchisor has a proven, intelligent system for communicating their value in a way that engages, calling them into action. The franchisor has a track record of building a brand that means something to the consumer in more than one market. The franchisor must have systems in place, which, if followed, are proven to help you generate new business and establish the same brand equity in your local market.

  3. Operations. They have proven systems for managing employees, controlling costs, and profitably delivering products and services that add value to the customers.

  4. Financial controls. They must have a deep understanding of how to measure and manage the business according to key financial performance criteria so an acceptable percentage of the revenue generated by the business flows through to the bottom line.

  5. Recruiting high-quality franchisees. The success of a franchisor is built on a foundation of successful franchisees. Skilled franchisors know how to identify and recruit franchisees that will succeed in their system and say "NO" to everyone else.

  6. Training and developing franchisees into peak performers. Peak-performing franchisors know what it takes to win and have their KASH (Knowledge, Attitude, Skills, Habits) model well identified. They know how to transfer their knowledge and develop franchisees' skills. They help franchisees acquire the mindset and habits of a master had hold franchisees accountable for consistently executing the high-priority activities that produce most of the results. They track franchisees' progress and offer consistent and valuable feedback on how to raise their game to the next level. They value and embrace continual learning. Learning and advancement are strong fibers woven into the culture of the organisation. They give franchisees the experience of being coached and supported, not managed and controlled.

  7. Creating positive franchisee-franchisor relationships. Excellent franchisors have created a powerful, interdependent relationship with their franchisees. They work together to increase brand equity rather than fight to either control or resist being controlled by the other party.

Find yourself a brilliant franchisor with the skills listed above and you'll be onto a winner!

Wishing You Every Success With Your Franchise

John Field

www.TheFranchiseSuccessFormula.com