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3 Core Strategies For Building Successful Franchise Organizations How to attract potential franchisees to invest in your business.

By Rick Grossmann

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The most common questions I hear from franchisors are usually related to growth strategy. In other words, what are the core strategies that differentiate the successful from the mediocre?

Strong leadership determines the overall success of the organization, but how can this be defined or broken down to actionable strategies? People often ask me how we created a franchise growth strategy that enabled us to grow to 150 units in less than three years. This is the secret sauce! When I coach my franchise executive clients, we begin with three core strategies.

Related: Our Top 10 Franchises You Can Buy

As I described in my book, Franchise Bible 8th Edition, The Upside Down Pyramid strategy sets the pace for everything since it is a core belief. This will get the company moving in the right direction and keep the focus strong as franchise owners are added to the community. The Three Decision Lens Philosophy then kicks in to make sure the company stays on track and makes good solid decisions that will benefit the franchisees and the overall growth of the organization. Lastly, the Franchise Glue creates a strategy for long-term maintenance that inspires aggressive growth and peak performance.

The following are the core leadership strategies that I identified in Entrepreneur Magazine's Franchise Bible 8th Edition.

Related: Just How Much Does It Cost to Own a Fast-Food Franchise?

The Upside Down Pyramid

This strategy is a paradigm shift from the common corporate organizational structure. Typically, you see the leader at the top of the pyramid governing over the team members, which trickles down to the employees and eventually the customers.

Franchising is a very unique business model and is very different from a traditional corporation. The primary difference is that the franchise owners are independent business operators, not employees. The Upside Down Pyramid strategy flips that model on its head by placing the leader(s) at the bottom, bearing the weight of the company infrastructure on their shoulders. Franchise owners then are viewed more like the customer and supported accordingly.

Related: 5 Affordable Franchises You Can Start for Less Than $10,000

The Three Decision Lens

Every decision a franchisor makes has Legal, Practical and Political implications, so these three factors have to be considered whenever a decision is made. Making good decisions is mission critical to the successful growth of a franchise organization. Many franchisors have stumbled or even failed because of poor decisions that negatively impacted their franchisees.

The Three Decision Lens Philosophy is tool that enables a franchisor to consider the total impact of their choices before the decision is made.

Related: 5 Low-Cost Franchises You Can Start for as Little as $4,000

The Franchise Glue

Franchise Glue is everything a franchisor does that sticks the franchisees to them. Ongoing support and training, buying power, technology tools, innovation, events and other programs and systems that endear the franchise owners to the brand. These are the reasons that franchise owners stay with the brand and have no problem paying ongoing royalties.

Once these three strategies are implemented and the leadership spoke is in place, we can build the remaining spokes which are marketing, operations, finance and technology to head for the "hockey stick" growth of 100 units and beyond.

Like any other business strategy, the most important factor is your willingness to buy in and execute. The best game plan in the world is useless if it is not put in to action. Building a healthy and thriving franchise organization is much like exercise. Long term and consistent exercise programs generally lead to a healthy person.

I will be posting a series of articles that will break these three strategies down in more detail including real world examples and tips for implementation. This will allow you and your team to focus on one strategy at a time and work on implementation steps. Stay tuned over the next several weeks and try working these strategies in to your franchise business model and see how it impacts your franchise community.

Rick Grossmann

Entrepreneur Leadership Network® VIP

Founder, Author, and Head Coach

Rick has been involved in the franchise industry since 1994. He franchised his first company and grew it to 49 locations in 19 states during the mid to late 1990s. He served as the Chief Executive Officer and primary trainer focusing on franchise owner relations and creating tools and technologies to increase franchisee success.

Rick developed and launched his second franchise organization in 2003. He led this company as the CEO and CMO growing to over 150 locations in less than three years. He developed the high-tech/high-touch franchise recruiting and sales system.

Both companies achieved rankings on Entrepreneur magazine’s Franchise 500 list. During this period, Rick served as a business and marketing consultant to small businesses and multimillion-dollar enterprises. He also consulted with franchise owners and prospective franchisees, franchisors, and companies seeking to franchise around the world.  Franchise Bible Coach has been voted a top franchise development firm in Entrepreneur's 2023 Top Franchise Suppliers ranking.

Rick is the author of Entrepreneur Magazine's Franchise Bible series, and his 9th Edition was released worldwide in April of 2021. He is also a contributing author to Entrepreneur magazine and other industry publications on franchising and business.

He currently heads up the Entrepreneur Franchise Advisors program, serves as an executive coach and strategist for multiple franchise clients, has been voted as one of the Top Global Franchise Influencers consecutively since 2021, and is the co-host of the Franchise Bible Coach Radio Podcast.

 

 

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