What makes a successful franchise?
What makes a successful franchise?
According to the 2015 bfa and NatWest franchise industry survey “A record 97% of franchisee-owned units reported profitability, with 56% saying they are ‘quite’ or ‘very’ profitable.” Whilst this indicates this is a great time to look at buying a franchise in the UK, it doesn’t mean that buying a franchise equals a one-way ticket to easy success and making money.
Running a business, whether you’re buying a franchised business or setting up on your own, is hard work and requires a strong drive and motivation to succeed. If you follow the system of the franchise you buy, and take on board the points in this article, you’ll be better prepared to ensure your efforts result in you being the owner of a successful franchise.
Drive and motivation
As already mentioned if you, as a business owner, are not devoted to reaching your goals, you risk setting yourself up either for failure or, if you’re lucky, limited success. Whether you buy a franchise where you work alone, or as part of a bigger team, the level of skills and motivation that you bring to the business can make or break it.
You must write a business plan, which includes clear goals and actions. Your franchisor should ask for and discuss this with you before you open your franchise. Your business plan should include information on the following:
- Executive Summary
- Business Overview
- Operations Plan
- Market Analysis
- Products and Services
- Sales and Marketing
- Competitive Analysis
- Management Team / Key Players
- Financial Plan
If you’ve never written a business plan before here’s a link to a YouTube video, published by Business Wales, outlining what is required.
Incentives and training
A good franchisor will look at ways to incentivise their franchisees in order to stimulate continual growth and development. This might be in the form of awards, league tables and rewards. On the back of this, where required, ongoing training will be provided. In order to become a successful franchise, you as the franchisor should make the most of any incentives and training made available. If you are running a franchise where you manage a team of people, you also need to provide the same or similar to your team so they can contribute to the success of the business, and importantly, feel valued whilst doing so.
As well as incentives and training, a successful franchisee will have created a positive working environment – physically and mentally – to empower staff and encourage them to take responsibility and share ideas.
According to Trudy Brunot writing for the Chron website;
“Our work environment encompasses more than the employee lounge, office area and lobby. Policies, resources, professional relationships and company culture also fashion the environment in which we work. Author and University of Virginia Professor Scott A. Snell, in the book, “Managing Human Resources,” defines a positive environment in the workplace as an atmosphere of employee enthusiasm that improves organization performance. Workers reap social, health and personal benefits from a positive atmosphere at their place of employment. Organizations that fail to foster a positive environment for employees risk hampering their ability to succeed.”
Territory and location
When looking at franchise opportunities, be sure to look at the size of the territory you are planning to buy. Work with the franchisor to truly evaluate whether there is a sufficient number of potential customers you can target and serve as you grow the business. A good franchisor will be happy to work with you on this and should be able to illustrate how a territory compares to others within their network.
Your location within the territory can also be a key factor – and dependent on the model you buy – you need to make sure that either your customers can easily find and get to you, or you can easily find and get to your customers. If you are delivering a physical service or product to your customers – at their choice of location – some careful planning is also required on your part, to ensure you maximize the number of visits you or your staff can carry out each working day.
Sell, sell and keep on selling
It might seem an obvious key factor to success, but selling and marketing need to be a regular, ongoing activity throughout the lifespan of your franchise. Many franchise brands will help you with your marketing and some may charge an additional marketing fee on top of your franchise fee to support this. Essentially whichever franchise you buy, the responsibility to sell and succeed remains with you. You must action regular activity and always follow up leads.
Once you’ve sold your services you need to retain your customer base and encourage positive customer recommendations. This can be done through the provision of consistently high levels of customer service. Your customer service levels could be pivotal in your business standing out from the competition and it’s important that everyone in your business is able to understand and support this.
Here’s a link to a great blog by Gregory Ciotti which explains this list of 15 top employee skills required to deliver a high level of customer service:
- Clear Communication Skills
- Knowledge of the Product
- Ability to Use “Positive Language”
- Acting Skills
- Time Management Skills
- Ability to “Read” Customers
- A Calming Presence
- Goal Oriented Focus
- Ability to Handle Surprises
- Persuasion Skills
- Closing Ability
- Willingness to Learn
Many people buy a franchise as a lower risk method of buying and running their own business. Do your research and buy into a franchise brand with a proven business model, then follow it, plan and listen to the advice given by your franchisor and fellow franchisees. Success can help to breed success.