How to Ensure Your New Franchise is a Huge Success

As a franchisor, you might be very content with opening over 100 franchises. For some, however, nothing short of world domination will be enough.

So, if you are a franchisor who pictures an amount of franchises on a much grander scale, you might wonder: What does it take to become the next McDonald’s?

Well, here are a few tips which will get you on the right foot:

First of all your franchise requires uniqueness. Being successful and making it to the top of the world starts with the concept. Your concept needs to be unique yet still maintaining a need and interest in society. And when it comes to the franchise concept, hoping to rule the world must start by breaking new ground and not following in the steps of others. Uniqueness may be as simple as a new recipe, a fresh marketing campaign or a new unique twist on an old service. Ideally, your unique selling proposition involves waging out a competitive position against which your competitors cannot or will not respond. Carve out a position in the marketplace where other competitors chose not to respond.

Certainly, no matter how unique the idea, it still has to work. Ultimately, that means return on investment. Nothing sells franchises as fast as the reputation that a particular opportunity is a money-maker. On the other hand, nothing can disrupt a growth opportunity as fast as failing franchisees. Therefore, you need to work meticulously and diligently in order to maximize the franchisee’s returns. Firstly, you need to determine if there are ways in which the initial investment can be reduced. The benefits? Well, not only does it improve returns from a percentage basis but it also increases the number of franchisees in the investment pool.

In addition, you need to strive to aggressively manage the franchisee’s income statement. Even though top line performance will have the most direct impact on your revenue stream, ultimately, the expense side management will result in more successful franchisees and ultimately in increased franchise sales.

Thirdly, you need to start with a plan. Success in franchising does not happen by accident. Success is designed from day one and happens because companies execute according to a plan. Good planning involves a comprehensive understanding of the competitive landscape and benchmarking your closest competitors. No matter how unique your franchise concept is, every franchisor out there has competitors and it is your job to know how your potential franchisees view you in relation to them.

After you have gained sufficient knowledge on the competitive landscape, you need to properly position the offering, structure the business relationship and determine whom to hire and when. Make sure you base your decisions on a financial analysis to ensure you have the resources necessary to implement these well-laid plans.

Next, in order to be the next McDonald’s, you need staying power and determination. That means building a strong value proposition into the offering. Larger and better established franchisors boast substantial value in their brand and the years of advertising that went into creating it.

However, for newer franchisors the brand itself in the short term is likely to be a lesser part of the value proposition. Therefore, you need to concentrate on other elements of the value proposition such as research and development, purchasing, back room services and other pieces of value.

Of course, if your desire is to be the next McDonald’s, you are going to have to start by selling a large amount of franchises. To do this, you are going to need to motivate people to investigate and purchase your franchise.

In order to do this, you need to build that pizzazz for your franchise. You need to generate interest in your franchise if you are going to be really successful as a franchisor. The absolute best thing you can do is put together a supreme franchise marketing plan. You will need to develop modern and high tech franchise marketing materials, which include brochures, videos and a great website. In addition, you may want to consider hiring a top franchise PR firm as well.

Of course, great franchise systems have great franchisees. Even the best franchise concept will fail if its franchisees are inadequate and not capable of running a profitable business or delivering a positive experience to their customers. Therefore, selecting quality franchisees is absolutely critical! If they’re successful, you’re successful. Of course, financial capability is a critical component to success, but there are other characteristics that are equally important. For instance, franchisees must possess a passion for the brand they are representing, have the ability to lead their operations team and be willing to filter their own personal interests through those of the entire franchise system. They need to be able to follow the system well and ready to accept help and advice from you as the franchisor.

Once you have found your franchisees, one of the most challenging aspects of hyper-growth is controlling quality. To maintain your value proposition to customers, protecting brand standards must be at the top of your priority list. The faster you choose to grow, the more important it is for you to develop the systems and tools necessary to ensure the consumer receives a consistent and quality experience. This involves high-tech operations manuals, training programs and possibly training videos. You need to inculcate these standards within the organization and be ready and able to make the tough calls when those standards are not upheld.

Of course, even the best laid plans can go off-centre, especially if you do not possess the capital to implement them. You need to secure an adequate capital amount in order to fund your initial legal and development costs which can be very expensive especially if your plan is excessive growth. Besides the basic start-up costs, you need to fund a budget for franchise marketing. In addition, you need to staff an organization capable of this aggressive growth. This involves hiring people to staff your franchise sales department and people to maintain quality in the franchises such as field representatives and trainers. Field representatives are of utmost importance and influence the franchisees satisfaction in their franchise business greatly.

Remember, understand your capital needs and then ensure this capital is available to you.

Lastly, you need to adapt to changes in the competitive landscape. This may involve additional items on the menu or other exciting offers.

Of course, the more successful your company is, the more certain you can be that others will follow you into both the consumer and franchise marketplace. Therefore, you need to anticipate these newcomers and do everything you can early in the process to erect barriers to entry and to stay one step ahead of the competition.

Keep in mind, nothing happens overnight. Building a successful franchise opportunity and maintaining the large growth involves time, careful planning and capital.

~~View all Franchise Opportunities~~