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10 Steps to Making Your Franchise the Next McDonald's

How to make sure your new franchise is a massive success

While the vast majority of young franchisors would be happy if they were to open 100 franchises, for others, nothing short of world domination will suffice.

If you're someone with grander designs, you might well ask, "What does it take to become the next McDonald's?"

1. Uniqueness
Making it to the top of the world starts with the concept. And when it comes to the franchise concept, "me-too" opportunities need not apply. The franchisor hoping to rule the world must start by breaking new ground and not following in the steps of others.

That doesn't mean your concept must be the first to the market-although that can certainly help. Uniqueness may be as simple as a new recipe, a fresh marketing campaign, a proprietary product or a new twist on an old service. And ideally, your unique selling proposition involves staking out a competitive position against which your competitors cannot or will not respond.

A couple of years after McDonald's began its incredible run, Burger King joined the fray, and was able to grow in near lockstep. They did that, not by copying the McDonald's formula, but by carving out a position in the marketplace where McDonald's chose not to respond-allowing the customer to "have it their way." And while they are not the next McDonald's, one might argue that they are the next best thing.

2. Make it Work.
Of course, no matter how unique the idea, it still has to work. And ultimately, that means return on investment. Nothing sells franchises as fast, especially in today's viral environment, as the reputation that a particular opportunity is a moneymaker. And nothing can derail a growth opportunity as fast as failing franchisees.

With that in mind, you need to be certain to work diligently to maximize the franchisee's returns. Your first order of business should be to determine if there are ways in which the initial investment can be reduced. Not only does a lower investment improve returns from a percentage basis, but by lowering the bar, it also increases the number of franchisees in the investment pool.

At the same time, you must strive to aggressively manage the franchisee's income statement. And while top line performance will have the most direct impact on your revenue stream, ultimately, the expense side management (developing purchasing discounts, for example), will result in more successful franchisees-and ultimately in increased franchise sales.

3. Start with a Plan.
Once you decide to franchise aggressively, you need to realize that 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 starts with an understanding of the competitive landscape and benchmarking your closest competitors. Regardless of how unique the concept, every franchisor has competitors-and it is your job to know how your prospective franchisees view you in relation to them.

Armed with this knowledge, you need to properly position the offering, structure the business relationship and determine whom to hire and when. You should then subject these decisions to financial analysis to ensure you have the resources necessary to implement these well-laid plans.

4. Build in Value.
In order to be the next McDonald's, you need staying power. And that means building a strong value proposition into the offering. Larger, better established franchisors will have substantial value in their brand and the years of advertising that went into creating it.

For newer franchisors, however, the brand itself, at least short term, is likely to be a lesser part of the value proposition. With this in mind, you need to concentrate on other elements of the value proposition: research and development, purchasing, back room services and other pieces of "value" that cannot be obtained by an independent businessperson.

5. Add sizzle.
Of course, if you want to be the next McDonald's, you are going to have to start by selling a heck of a lot of franchises. And to do so, you are going to need to motivate people to investigate-and ultimately buy-your franchise.

Call it what you will-sizzle, sex appeal or pizzazz-you'll need it to generate interest in your franchise if you are going to really hit it big as a franchisor.

While sizzle is, at least in part, a function of the concept it surrounds, the best thing you can do is put together a first-rate franchise marketing plan. You'll want to develop state-of-the-art franchise marketing materials, which include brochures, videos and a great website.

Since the sizzle factor tends to be viral in nature, you may want to consider hiring a top franchise PR firm as well. McDonald's was always a master of PR, starting with their sign that proclaimed "Over one million sold"-today, they simply cannot change that sign fast enough to keep up with the count.

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Mark Siebert is the CEO of the iFranchise Group, a franchise consulting firm that has worked with 98 of the nation's top 200 franchisors. He can be reached at 708-957-2300 or at info@ifranchise.net.
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