"Growth Can be Extremely Rapid" — Use These Tools for Your Long Term Franchise Success Plan Success in franchising does not happen by accident. Success is achieved because companies follow a sound and well-defined plan.
Key Takeaways
- The franchising environment has evolved significantly from the 1950s and 1960s. With over 3,000 active franchise companies in the U.S., the market is more competitive, making it essential for franchisors to make well-informed decisions early.
- Becoming a franchisor demands the ability to market and sell franchises and create a supportive infrastructure for the franchise network.
- Success in franchising is achieved by adhering to a well-defined plan.
The following excerpt is from franchise expert Mark Siebert's book Franchise Your Business. Buy it now.
In the 1950s and 1960s, companies could succeed in the franchise marketplace with a good concept and a well-honed sales pitch. But the days of fast money franchising are long gone. With more than 3,000 active franchise companies in the U.S. alone, today's competitive marketplace is far more complex than in decades past. To compete with the best, franchisors need to be armed with the best.
And the decisions that franchisors make early in the process will impact their ability to succeed. Because franchisors are able to grow while leveraging the time and money their franchisees invest, growth can be extremely rapid. But this "growth on steroids" has its disadvantages too. Any mistakes you make are replicated over and over—like a rogue gene—and if you do not realize it quickly enough, it may be too late for a cure by the time the diagnosis is made.
Start with the tools you will need
When you become a franchisor, you are entering a new business—and you will need to incorporate several new skill sets into your business arsenal. The primary skills you will need to develop are learning to market and sell franchises, as well as creating the infrastructure and leadership to properly support a franchise network. And as you're learning these skills, of course, the demands of your existing business will remain—so that may tax your management skills as well.
If you are like many entrepreneurs, you may find yourself prone to adopt the "Ready... fire... aim" strategy many of us used when we started out. But given the complexities of this competitive market, successful franchisors focus on several key issues before launching into this new endeavor:
- A sound business strategy
- Well-written legal documents to support the franchise strategy
- Quality control systems and processes
- Franchise marketing strategies and materials
- A plan for developing a capable franchise sales and support organization
Developing your franchise plan
To paraphrase Lewis Carroll, "If you don't know where you are going, any road will get you there." And never were truer words spoken than in franchising. The first and most important rule of franchising is this: Success in franchising does not happen by accident. Success is achieved because companies follow a sound and well-defined plan.
The best plans start with a specific goal and develop objectives and tactics that allow you to reach this goal. In franchising, you will need to address a number of franchise-specific topics in your plan: program structure, fees, territorial rights and other key business decisions that will lay the foundation for a long-lasting relationship with your franchisees.
Related: Tips and Strategies for Using the Balance Sheet as Your Franchise ScorecardPlan for the long-term
The best planning processes will also account for the long-term nature of the franchise relationship and the contract under which the franchisee will operate. Many franchise relationships span 20 years or more—and many times, franchises are passed down from generation to generation.
Think back 20 years ago. Were you living in the same house? Driving the same car? Using the same computer? Or even using a computer at all? As I write this in 2015, I'm amazed at the pace at which business strategy, technology and franchising have evolved.
So in planning your franchise, you need to structure something that will not just work today, but also give you enough flexibility to work 20, 30, 40 or more years into the future.
It doesn't stop there
Many of the most important elements of your plan will involve the services you provide to your franchisees, as these services will translate into costs to you as a franchisor, generally in the form of the people you will hire (or outsource) to provide certain services. Since you will need to understand the support you will provide to determine your cost structure, and since you will need to understand that cost structure to figure out what fees to charge your franchisees, writing about one without an appreciation of the other is a fool's errand. Putting together a cohesive franchise plan, spanning from fees to marketing to operational procedures, will set you up for the highest chance of success.
Related: These Are the Top 200 Global Franchise Brands in 2023
Franchise your business
Ready to grow your business? Franchising may be for you.
Expert franchise consultant Mark Siebert delivers the ultimate how-to guide to employing the greatest growth strategy in franchising. Siebert tells you what to expect, how to move forward and avoid costly mistakes as he imparts decades of experience, insights and practical advice to help grow your business exponentially through franchising.
Learn how to:
- Evaluate your existing businesses for franchisability.
- Identify the advantages and disadvantages of franchising.
- Develop a business plan for growth on steroids.
- Evaluate legal risk, obtain necessary documents and protect intellectual property.
- Create marketing plans, build lead generation and branding for a new franchise.
- Cultivate the franchisee-franchisor relationship.
Evaluate if this is the right move for you and discover how to get started with the help of Franchise Your Business.
