This is the recipe for a successful franchise
What does it take to run a profitable franchise? From consistency to creativity, this is what a winning franchise formula looks like
When you become a franchisee, you’re not guaranteed success.
Despite benefiting from an established business model with a proven track record, successful franchises still require hard work, dedication and determination.
So, what does it take to increase your odds of running a profitable franchise? Follow this recipe for success and you’ll enjoy longevity in the franchise industry.
A spoonful of consistency
Consistency is the backbone to all successful franchises. Only when consistency is achieved will customers trust your brand to deliver the same quality of products and service regardless of location.
If the franchisor doesn’t insist on uniformity, then you and all other franchisees are effectively chasing your own goals. These individual objectives could damage, and ultimately risk, the overall consistency of the brand.
In contrast, when consistency is prioritised, the whole franchise system benefits. It may not be realistic for the franchisor to have total control over each franchise, but with a robust business model, the chances of inconsistency are reduced.
This is important to remember when looking at a franchise for sale.
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A dash of resilience
The franchising industry has proven to be resilient, enduring even the most uncertain of economic situations. When you become a franchisee, you too must demonstrate resilience.
From a business perspective, you need to make certain that your business would withstand a physical or cyber-attack. The responsibility of the safety and security of your franchise, staff and customers is down to you, so invest in good alarm systems, back up data regularly and keep firewalls and computer malware up to date.
You’ll also have to display cultural resilience.
This is much more difficult, but will ensure the development and growth of your franchise. Having the ability to remain calm and maintain a positive outlook, whatever challenge threatens your franchise system, is a skill that will set you apart from the competition.
Cultural resilience isn’t easy to accomplish, but get it right and you’ll succeed where many entrepreneurs fail.
A sprinkling of creativity
One way of proving cultural resilience is by changing and innovating in line with major advancements in technology. Taking a creative approach has become a priority for many franchises and can result in business success and growth.
Meanwhile, if you’re a franchisee that isn’t willing to invest in innovative products or services with the support of the franchisor, then you may be doomed to fail. Lack of creativity and innovation can damage even the most successful franchises if they’re not prepared to change.
Possibly the most well know franchise failure is Blockbuster, the popular DVD rental business. This huge company, with an intensely loyal customer base, failed to embrace innovation and purchase Netflix in the year 2000.
This marked the beginning of the end for Blockbuster. They failed to keep up with the new streaming services and lost many of their faithful customers. Blockbuster went out of business in 2013, whilst Netflix has become the most popular way to watch movies at home.
Being proactive in times of change allows a franchise to set themselves apart from the competition. Without innovation, a franchise will stagnate and run the risk of failure.
A cup of being in the right place
For some franchises, location won’t have an influence on whether the business is successful or not; for others, it’s everything.
If your franchise has a physical store that relies on customers visiting, then you need to consider your positioning carefully.
Is your franchise accessible and easy to find? Does it stand out from the completion on a busy high street? Is there a regular flow of potential customers walking past?
These are all questions you must be able to answer positively to enable your franchise to thrive.
A bucket load of ambition
What is a franchise? Many entrepreneurs become a franchisee with the objective of growing their business quickly and effectively.
But, bear in mind that growth doesn’t always result in a profit being made. Expanding rapidly may be harmful for your franchise system; but being ambitious and growing for profit can be a winning combination.
An established growth strategy which is increasing in popularity and influence is multi-unit franchising. As a multi-unit franchisee, you’ll have the opportunity to build equity in your business much quicker than you could as a single-unit operator.
Due to your increased sales and profit, you may be able to negotiate better prices with suppliers, and maybe even get preferential rates for rent from your landlord. It takes lots of ambition and commitment, but being a larger franchisee has many benefits; both financially and professionally.