how to manage a successful franchise

8 Steps to Successful Franchise Management

Full Answer

How to make a business franchise a success?

How Do I Make My Franchise Successful?

• Make sure you have enough money. ...
• Follow the system. ...
• Don't neglect your family and friends. ...
• Be an enthusiastic franchisee. ...
• Recruit the best and treat them with respect. ...
• Teach your employees. ...
• Give customers great service. ...

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What are the risks of starting a franchise?

• 1. Product risk. Decide what you are selling. ...
• 2. Market risk. Knowing your customer and why, how and where they buy related products is arguably the most important risk factor to assess before launching your product. ...
• 4. Team risk. There is no way that one person can vanquish every risk. ...
• 5. Execution risk. ...

Why are franchised businesses so successful?

Why Franchise?

• Lower Cost. Unlike employees, franchisees make an initial payment in return for becoming a part of your business and then they continue to pay you a percentage of their revenue, ...
• Simpler Management. ...
• Faster Expansion. ...
• Better Market Penetration. ...
• Greater Commitment. ...
• Less Recruitment. ...
• International Potential. ...

What does it take to become a successful franchisee?

• In franchising, training should be continuous. ...
• Training classes are a good way to show your employees that they matter to you.
• Get all the training you can from the franchisor.
• regularly train and retrain all your employees.
• Hold refresher and advanced classes on a regular basis.
• Alert your franchisor when you need additional training.

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How do you manage a franchise business?

So if you're thinking of franchising a business or just starting out, keep these universal key steps in mind.Be Passionate About Your Product Or Service. ... Find Out Whether Your Community Needs This Franchise. ... Make Sure You Have Plenty Of Capital. ... Hire The Right Team. ... Pay Attention To Your Customer Service And Reputation.More items...•

How do I become a good franchise manager?

11 Franchising Tips for Managing Your Franchise BusinessFollow the proven system. ... Hire the best people and treat them right. ... Delegate to your employees. ... Use what your franchisor gives you. ... Manage your time efficiently. ... Acknowledge the fact that you will likely need franchise mentoring and assistance.More items...•

What are the five qualities of a good franchise?

5 characteristics of a good franchiseeAbility to follow instructions. The foundation of the franchise model is that all franchisees follow the same system, offering the same products and services in their respective territories. ... Adaptable to change. ... Driven. ... Similar qualities to franchisor. ... Forward-thinking.

What makes a successful franchise owner?

Franchise owners engage with people on a daily basis. Being personable and friendly are key factors for success. Positive interactions with customers, employees, vendors and the community are essential in developing those all-important relationships.

What skills make you a successful franchise?

5 “Must Have” Skills to be a Successful Franchise OwnerMarketing Skills. ... Business Management Skills. ... A Business Owner Mentality. ... Family Support. ... Ability to Follow a System.

What is the key to a successful franchise?

Make sure you have enough money. Determine how much you have to invest, how much you're willing to risk and how much you will need to live on for at least 12 months. Make sure you understand the initial investment required. Make a careful and rational decision about buying the franchise.

What are the weaknesses of a franchise?

There are 5 main disadvantages to buying a franchise:1 - Costs and Fees. ... 2 – Lack of Independence. ... 3 – Guilt by Association. ... 4 – Limited Growth Potential. ... 5 – Restrictive franchise agreements.

What makes a franchise attractive?

Lower Startup Costs Most entrepreneurs, especially when they're starting out, don't have access to that kind of money. When you buy a business franchise, you'll have fewer costs up front in many cases. Not all franchises are inexpensive, but in general, they are cost-effective investments.

What are the strengths and weaknesses of franchise?

Then, the advantages of Franchising are explained. These are brand recognition, low risk to failure, easy set up, ready customer portfolio and easy to find financial support. In the third part, the disadvantages of franchising are explained that are strict rules, dependency and high cost.

Are franchise Owners Rich?

The bottom line is that while a franchise can make you independently wealthy, it isn't a guarantee. Choosing the right business in the right industry, and going in with preexisting entrepreneurial experience and/or existing wealth can help, but your income-generating potential may still be somewhat limited.

What is the most important element of franchise?

Brand consistency and service consistency across multiple franchise outlets are key factors in running a successful franchise business. Establish strong standard business processes and practices which will enforce consistency across all of the franchise outlets.

What are the four elements of a franchise?

When it comes to the new opening process, franchisors should consider four key elements that contribute to success:The importance of following the system,growing with the right franchisees,establishing a successful opening process, and.assisting franchisees with support teams.

Is it hard to manage a franchise?

Running your own franchise is still hard work, and there are drawbacks to opening a business that requires operating by someone else's rules.

What is the role of franchise manager?

The franchise manager will be responsible for managing and planning the franchising business of the company. They will be accountable for developing franchising opportunities and for offering constant support to franchisees to ensure the total success of the business franchisor and franchisee.

Can you make a living from a franchise?

Franchise Business Review found that the average annual pre-tax income of franchise owners in America is $80,000. Only 7% of franchise owners make more than $250,000 annually, and 51% earn less than $50,000. Legally, franchisors cannot give income amounts or forecasts of future income.

How can I grow my franchise?

To grow your franchise system and sell franchises, you should:Making sure that now is the right time to franchise.Budget strategically for marketing and recruiting.Identify your brand differentiators.Season your brand organically and early-on.Over-support your first few franchisees.Build up solid unit economics.More items...

How to get word out about your business?

You'll want to use your marketing budget to get the word out about your business in every way you can, from social media advertising to direct mailers and billboards . You may have the best-run franchise in the world, but if people don't know your business exists, and especially if you don't have a brand name that the world recognizes (such as McDonald's or Burger King), they won't pay you a visit.

What to do if people don't know your business exists?

7. Focus On Customer Retention.

What is Forbes Los Angeles?

Forbes Los Angeles Business Council is the foremost growth and networking organization for business owners in Greater Los Angeles. Do I qualify?

Can you cut corners in a franchise?

You can't cut corners in any franchise or in any industry. Even getting the little things right, like finding a consistently friendly receptionist, is very important. Customer reviews on Yelp and other social media sites can make or break a business.

Can you be successful if you buy a franchise?

But obviously, just because you buy a franchise doesn't mean you'll be successful.

Do business owners want to franchise?

Many business owners want to run a franchise, and for good reason. You have your own business, but you're also buying a business system — one that you know works. Instead of starting a business that could bomb in a few months or years, you're buying a business that has worked elsewhere and presumably will work in your community.

Is franchising hard?

We all know that franchising is hard, and it's important to do your due diligence and so on. But still, you don't know what you don't know. Your community may not have enough people that fit the target demographic to support whatever franchise you're interested in. Or maybe there are too many restaurants or automobile service garages or whatever you're thinking of buying.

Why do people buy franchises?

Because when you buy a franchise, you're essentially partnering with a company that already has brand recognition, loyal customers, and an established way of operating their business, which gives you a head start towards success. It's that simple.

What does a franchise owner do?

A franchise owner will typically spend more time at the place of business handling things like payroll, marketing, and managing the team.

What is the work ethic of an owner?

Work Ethic A willingness to put in the time and effort will take you far as an owner. There will come a time, with hard work, that you can enjoy the benefits of being your own boss, but in the beginning, you'll need a strong work ethic.

Why is understanding the business of what you're doing important?

With this comes the ability to delegate tasks to people you can trust to handle them. While you can be involved all you want, you can't do it all by yourself, or else you'll burn yourself out.

Do you need to spend more time with your business than you do at home?

You will also need a willingness to spend more time with your business than you do at home. A lot of people buy a franchise with the idea of having more freedom, thinking it'll run itself. That's not the case at first. You will have to roll up your sleeves and make it happen.

Is it harder to own a franchise or work for someone else?

While some people buy a franchise to work for themselves and maybe working fewer hours, many franchise owners will tell you that it can be harder owning your own business than it is working for someone else. The better you manage your franchise, the smoother your franchise will operate.

Do franchises help you succeed?

Franchises normally provide extensive training that can help you succeed in those areas . Of course, when looking for a franchise to buy, it never hurts to choose one in an industry where you have at least a little bit of experience.

What is a franchise?

A franchise is a business where the owner or franchisor allows a franchisee to access the business knowledge, trademarks, and processes. The franchisee can then sell a service or product under the franchisor’s business name. When starting a franchise, usually the franchisee will pay a start-up fee and annual fees, depending on the set-up.

The stages of the franchisor-franchisee relationship

Your franchisor-franchisee relationship is a long one. Similar to a marriage, it should be built on trust and commitment from both sides of the party. By exploring the different stages of this unique relationship, we can look to determine where along the franchisee journey has the greatest impact on the overall success of the franchise.

3 must-have skills for franchise management

As a franchise owner, your days are spent managing your business and taking a deep overview of your business. At the same time, you utilize your personal skills to maintain good working relationships with your franchisees. While franchising is about growing your business; at its core, franchising is about relationships.

8 tips on how to manage franchisees

Running a franchise with a large network is stressful; that’s no surprise. Although you may demand a lot from your franchisees, with plenty of support and training, most franchisees can find success running their own business. Good franchisors set the tone for communication and management.

In summary

The unique relationship between franchisee and franchisor is crucial to the success of your business. Supporting your franchisees is a delicate balance of being present while also not interfering with the day-to-day operations.

How to maximize the value of a franchise?

It is important for the business owner to maximize the entire value of the franchise system by abiding by the established methods and honoring the brand you bought into. Any solid franchisor has your back and will support you. At the end of the day, however, helping yourself and managing your business effectively is a huge key to continued franchise success as well.

How to become a franchisee?

1. Follow the proven system. For those franchisees that came before you, it’s very likely to work for you too, if you follow the systems already set up. 2. Hire the best people and treat them right. Your most important resource is the staff.

Why do franchisees delegate to employees?

That is why we hire employees. Delegation relieves some of the load from the franchisee and provides the employee a sense of importance and ownership in the operations of the business.

Why is it important to have a solid franchise system?

A solid franchise system works to help hardworking people build something for themselves and their families without having to reinvent the wheel. Of course, you also will need to be committed to the tried and proven business model and the franchise system that has worked for others who came before you. Learning how to best manage your franchise business and applying those lessons is crucial to owning and operating a successful franchise.

Why is franchising an appealing option?

Whether you relate to these cases or have your own valid reasons for wanting to start your own business, franchising becomes an appealing option because you can be your own boss but also have the support and training from a company that will have your back.

How to manage time efficiently?

Manage your time efficiently. You should work with your team and do all the things you need to address today’s workflow but pay attention to the bigger picture. Attend to those important tasks and develop the presence of mind to know when to proceed to the next item if something is taking more time than expected.

Why is it important to own a franchise?

It’s also one of the largest benefits of owning a franchise, so doing so can help your business succeed as well.

Why is it important to make payments on a franchise?

Simply put, you don’t want to waste time chasing down payments. Time is money after all. Payments, though, are obviously necessary for ongoing profitability . Consistent, reliable payments are even more important when building a successful franchise.

What is franchise opportunity?

Opening a franchise is an incredible business opportunity that provides small business owners structure along with the immediate benefits of a trusted brand. We’ve teamed up with many owners of successful franchises over the years, helping them turn their challenges into opportunities for growth. We’ve learned a few important lessons for opening and running a successful franchise along the way. Whether you’re ready to open a successful franchise now or aiming to push your existing franchise to the next level, read on for our tips and best practices for running a successful franchise.

Can you change hours for a franchise?

Changing the hours, services, and advertising of your business could put you in jeopardy. Consistency across the brand will help you and your fellow franchisees. Thankfully, many franchises make this information easy to access at all times. Ask questions when you’re not sure.

Do franchise owners understand what it takes to run a business?

Remember, owners of other successful franchises in your area understand exactly what it takes to run your business and can be a wealth of knowledge when you need advice.

What are the traits of a franchise?

The new world order doesn’t change the basic ingredients of such a relationship: service, reliability, sociability and trust for the sake of a happy customer.

What does a franchisee pay for?

The franchisee pays a royalty, initial fee or both to operate under the particular name and use the brand's methods. As the founder of a private surgical center franchise, I've learned what it takes to build a successful franchise. Let's look at two basic types of entrepreneurial franchises: traditional franchising and business format franchising.

What are the benefits of franchising?

Benefits to the franchisor in business format franchising can include more sales and geographic extension of the brand, and the company standards are maintained for consistency in the public eye. Benefits to the franchisee include a turn-key operation with support, design and supplies provided to establish an up-and-running business .

What is traditional franchising?

Traditional Franchising. In this type, the franchisor licenses its trademark and logo but doesn’t supply the set-up for the franchisee’s actual business to run. The franchise is associated with the original brand, often selling products made by the franchisor. For example, beverage and car manufacturers often are set up in this way.

What is franchising in business?

Franchising is a way of business by which an established brand can extend its reach. This is done by franchising to others who will be perceived as associated with the brand and sell the products or services as if they were the actual established brand. The association involves a business arrangement in which the franchisee pays for ...

Is a franchisee obligated to operate on a system established by the franchisor?

As such, the franchisee is obligated to operate on a system established by the franchisor; the business must be run a certain way, lest the franchisee risks a breach of contract. The franchisor’s standards are maintained while the franchisee personally manages the day-to-day business activities. Benefits to the franchisor in business format ...

What makes a franchise a good franchise?

What makes a good franchise is an agile yet strong and supportive infrastructure. All franchisees need initial training when they start. Even if they have experience, they’ll still need to learn the ropes of your operating model. Providing ongoing training ensures standards are maintained and benchmarks are met.

What makes a successful franchise owner?

A successful franchise owner has an entrepreneurial spirit, the patience to invest time and energy before reaping the rewards, and the agility to adapt as their franchise grows. More than offering a brand and operational business model, a great franchisor should assist franchisees with location selection, financial advice, marketing, and management.

How does a franchise grow?

Just as a business becomes successful by hiring the most talented employees, so too can a franchise grow by rubbing shoulders with others in the field and learning from their experience.

How to grow your franchise?

To grow your franchise, you need to ensure your franchisees are properly trained and implement feedback mechanisms for customers to rate your service. Without constructive feedback, you won’t have the necessary insights to know where or how to improve. Good customer service leaves a lasting impression and encourages people to return.

Why is customer retention cheaper than acquisition?

Customer retention is generally cheaper than acquisition because returning customers are likely to spend more on your product or service. Happy customers recommend others and are more likely to remain loyal.

How to attract new franchisees?

You will also need to invest further capital into a franchise sales website, branding, franchise sales presentations, paid advertising and joining relevant broker organizations to attract new franchisees. Hiring a professional digital marketing agency can alleviate the admin but will cost an additional fee, that while worthwhile, still needs to be budgeted for.

Why is it important to hire people?

They are responsible for how you operate, how your business presents itself to customers or clients, and ultimately, how successful you are — this goes for your business team and prospective franchisees. Striking a balance between job role competency and company culture when hiring is important, too; there’s no point in employing a competent hire who doesn’t mesh with your company’s values and ethos.