Tips on Profitable Franchises

Did you know that in 2019 the Marriot Hotel chain opened a huge 516 franchised hotels? This level of growth is something most business owners can only dream about. So how do you create a successful global franchise from your business?



Creating a franchise is not as hard as you think, but needs to be planned carefully. Read on as we discuss how to build profitable franchises. 

Have a Clear Concept

You have been running your business for a long time, and your customers have probably come to know its core concept and values. Part of this company culture will come from you being at the helm. However, when crafting a franchise, you need to ensure this carries on into the franchisees who are taking on your brand. 

If you can not give them a core concept, or your mission is unclear, then this outlook will not transfer. You can't expect them to understand your business if it is not spelled out in black and white. 

Start by crafting a clear mission statement. It must state what you do and how you do it. 

Follow What Has Came Before

It is very unlikely that your business niche has not been franchised before, and this is a good thing. If others have gone before you, it means they will have had successes and mistakes which you can follow or avoid. 

Do some research into similar franchises. For ones that were successful, see what path they took and what worked in that process. Did they have any problems that you can try to avoid?

For the less successful ones, see what they did wrong. Even the biggest franchises can have times when changes are made and things go wrong. For example, Subway had numerous problems related to distribution even as a huge global franchise. 

Pick Franchisees Carefully

To get your franchise off the ground, it can be tempting to take anyone who is willing to invest. However, to build a quality franchise you need to pick the right people, at least in the early days. This will ensure the long-term security of your franchise. 

You are entering into a long-term partnership with your franchisees. This will also involve a lot of financial and emotional investment. Therefore, it is imperative to ensure you can work with this person. 

Select people who understand what you are doing and the ethos of your company. Treat every franchisee the same, and don't offer special discounts or rates to the first people to sign up.

Implement Robust Training

Once you have the right franchisees, then for a quality franchise that remains consistent, you need great training in place. Firstly, it helps the franchisee understand the systems you have put in place. This can be everything from how to use the product and service to managing the books. 

It can also warn them of challenges they may face and how to overcome them. Finally, you can train them in how to train their own staff. 

Respond to Feedback

Pursuing a profitable franchise is about constant improvement, and the best place to get that is from feedback. This should come from all levels of the workforce and the customers. 

People working in the franchise will often spot problems and notice how things can be improved before you. They are the eyes on the ground. Everything from improving efficiency to the company culture can come from them. 

The customers are the ones who are investing in the product or service of the franchise. Even if your businesses are booming, you can always turn to them to ask opinions and see what they want. They could give you an idea of improvements or new products to offer.

Make Support Easy to Access

As a franchisor, you are offering two main things. The reputation of the brand and business you have built, and your guidance. Without these, the franchisee may as well start their own business, so it is important they can get guidance easily. 

After the training scheme, make support easy to access. Business throws up a lot of unique problems, and they may need advice from you they can not get elsewhere. 

Develop Systems for Replication

Once you have systems for franchising that work, then you need to be able to replicate them. This ensures consistency across the brand. The quicker and more efficiently you can get the franchises off the ground, the quicker people start to make a profit. 

Make time to analyze these systems. If you can implement any improvements then do so. See if you have any bottlenecks in the rollout process and work out how to alleviate these holdbacks.

Set Goals

Setting goals holds you accountable for your own actions. These goals should be shared throughout your franchise. Doing this ensures that everyone can see how they are contributing to the overall goals of the business, from workers to managers. 

Measure your achievements using key performance indicators (KPI). Each franchise unit should have targets for its growth in revenue, net profit margin, and the number of leads it has. You can also check customer satisfaction and use this to inform the goals you set. 

Craft a Long Term Plan

Once you have a method of franchising that works, you can begin to look at the next stages of your business. You have a process that works, so why wouldn't you take it even further? 

Craft a long-term plan for growth. Are there extra products and services you could offer? Could you roll out franchises further afield, to other areas and even countries?

Starting Profitable Franchises

The foundation for a profitable franchise is making sure that your business is sound and secure to begin with. Address any issues you may be having and make sure all of your avenues are covered before rolling out a franchise. With this foundation, you may become a profitable, global business. 

If you are looking to franchise your business, then Strategic Franchise Development should be your first stop. We specialize in business outsourcing and development. Contact us here and take the first step in turning your company into a world franchise.