10 ways to build a brilliant franchise model

How can a franchisor develop a franchise system that stands above the competition? Here are 10 steps that elevate the business:

1. Show leadership

Whether franchisors are starting out, or heading up an established brand, the need for leadership is paramount. Any franchise team members as well as the franchisees themselves will need direction and to know that problems get solved, new ideas adopted, and teams managed for high performance.

2. Have a vision

Where is the business headed? What will the future look like for the franchise? How can franchisees be confident they are invested in a forward-looking organisation? The franchisor needs a vision, and needs to ensure this is manifest to everyone in the business.

3. Develop clarity of communication

The ability for franchisors to communicate with all participants in the business is crucial – whether that’s spreading the word about the mission of the business, translating the vision into practical actions, explaining a restructure, introducing new processes, informing franchisees of marketing campaigns, updating manuals, sharing team and franchisee successes.

Miscommunication or lack of communication is often cited as a source of franchisee dissatisfaction so it is beneficial for franchisors to bring transparency and clear communication channels to the franchise model.

4. Establish a strong system

At the heart of any high performing franchise model will be a strong system capable of surviving the highs and lows of a business cycle.

Franchisees will want to invest in a franchise structure that works, that delivers profit, that will be easy to sell on, that has a committed network of franchisees and a reliable support team. That’s on top of the manuals, training and marketing campaigns that they will need to operate their business.

A concentration on expanding the franchise footprint too fast may cause the system to be overloaded and so steady growth with the appropriate development of support structures can be a more appealing option to franchise buyers.

It is critical to manage disputes smoothly and quickly, and to look at ways to minimise disruption because a franchise system buried in disputes and disagreements between franchisees and the franchisor is a business which is expending time, energy and resources on fighting battles, not on business building.

A history of disputes will deter franchise buyers anyway.

Franchisors might need to take a long look at the franchise agreement, at the areas that are causing concern for franchisees and a readjustment to ensure the system works for everybody. McDonald’s famously has its three-legged stool analogy – the system has to work for the franchisor, the franchisees and the suppliers.

5. Adopt good faith

The Franchising Code of Conduct governs the franchise sector. Wise and reliable franchisors ensure they are following the Code and updating all relevant documents and information as required.

Franchisors who are compliant can showcase this to franchise buyers.

The most recent update to the Code incorporated the concept of acting in good faith, and it pays for franchisors to adopt this policy.

6. Build a team

However small the franchise team, it needs care and attention. Building a team is going to be fundamental to the success of the franchise system – and this extends beyond the support and head office team to the franchisees.

The network of franchisees will be the biggest team any franchisor has, and it’s one of the strengths of a franchise model. Mentoring, advice and concern for each other’s wellbeing are prevalent among high performing franchisee networks.

Franchisors should consider how best to communicate directly with franchisees en masse – is that through a Franchise Advisory Council, through smaller regional forums, through an intranet?

7. Make franchisees the stars

Who is the best ambassador for the brand? Happy and profitable franchisees attract customers, support the brand, showcase the system to prospective franchisees, exceed targets and win awards.

Recognising the importance of the franchisee team, and making them the stars of the business, makes sense.

8. Identify the 5% difference

What will make the difference between an average franchise business and a strong franchise model? It’s the little things, the incremental percentages that separate high performers from the ordinary.

Whether that’s attention to detail in-store, attitude to customer service, monitoring COGS, reducing waste, improving work processes, providing IT tools, restructuring finance…

9. Bring in young blood

Many franchisees outlast franchise support teams, and as Greg Nathan’s recent study shows, longevity of service in franchisees demands a specific approach from franchisors and their support teams.

Of course these franchisees are invaluable for the insights and experience they bring to the business, but it’s beneficial to have a mixed profile among franchisees.

Bringing in younger franchisees can boost the business too – enthusiasm, energy, fresh ideas, willingness to learn, ambition –  all these attributes add to the strength of the franchise system.

10. Share the passion

Franchisors who live and breathe the dream of the business and can share their enthusiasm with franchisees and the support team will make it easier for others to dream. And dreams fuel our day-to-day actions.