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Best Practices for Managing and Growing a Successful Franchise Business
January 28, 2023
Franchise systems can be highly successful for both parties involved, with franchisors getting to leverage their technology and business systems without the risk of expanding organically. In contrast, franchisees benefit from using a tried and trusted business model with significant brand recognition. That all sounds perfect, but as any business owner knows, nothing’s ever really that easy, and franchise business growth is far from guaranteed.
To help you find success, whichever side of the system you’re coming from, here we’ll look at the top franchise best practices for building a prosperous business.
Franchise Best Practices for Franchisors
Leverage Technology and Innovation
Unique, innovative and patented technology in franchising is what gives your operations an edge over their local competitors and what entices potential franchisees to join the system. There are a number of factors that make your business a valuable proposition, and the intellectual property (IP) that you hold is chief among them, so make an effort to constantly hone your technologies and systems, working to make them better. Then don’t be afraid to value them. You might think that the way you do something that takes less time than someone else with a better result is just a neat trick you found, but it could actually be the core of a successful franchising business.
Set Out Clear Business Processes
Just as important as the technology underpinning your business can be the systems that lay out how to put that technology to best use. Your operations manuals are also highly valuable IP that can be leveraged to add significant value to your franchise offering. Your manuals will give a franchisee basically everything they need to get running from Day 1, providing useful insight into the best way to use your technologies, make sales and deliver great service. Good documentation is one of the most important franchise best practices.
Effective Communication with Franchisees
One of the major advantages you are giving franchisees over their local competition is that they can pick up a phone at any time to get help in dealing with a business situation. This support can be a major difference maker in deciding whether the business succeeds or not, so make sure that the avenues and forms of franchise communication are as clear as possible. The network of fellow franchisees in the system is also a useful and valuable resource, but a system should also be guided to ensure people’s time is being respected.
Maintaining High Standards of Quality
Ultimately, if your franchise quality standards are kept high, and you deliver a consistently good product or service, chances are your franchise system will make it. However, ensuring these standards are kept across all franchisees, which could be based at different ends of the country or even the world, isn’t always easy. One of the most important aspects of franchise business management is being able to monitor the quality of your deliverables across time and throughout your system. The franchises carry your name, so that’s what will suffer if standards aren’t kept.
Franchise Best Practices for Franchisees
Stick to The System
The reason why you pay a franchise fee is to get access to the technology and operations processes of the franchisor, so why then go and try to reinvent the wheel anyway? Franchising is seen as a ‘safer’ investment when starting out as a new business precisely because the system has been tested and worked on over possibly decades and by many other franchisees. Do your research to find a franchise you like, but after that, you have to buy in and go with the system.
Plan Your Cashflow
Cashflow is the lifeblood of your franchise. It’s necessary to keep up payments on any financing you may have, pay staff and, importantly, for you and your family to live on. That’s why one of the most important franchise management best practices is to always ensure you’ve got something in the bank and a steady flow of income (as in not a mountain of debtors who owe money but haven’t actually paid). This starts right from your initial investment in the franchise. While getting financing is fine and the norm for most businesses, try to make sure that you factor in cash flow and how much is going to be in the bank at, say, months 3, 6 and 12. If you cut your margins too tight and overspend on the initial investment, you could find your business running on empty when it’s just about to take off.
Your Service is Your Advertising
Being part of a franchise system will get you instant name recognition and even nationwide advertising campaigns. However, the one thing that’s going to make your business successful is getting a good name and reputation in your own locality. In this sense, your service really is the best advertising you can get as people won’t forget quality. If you find your time is running too short to go the extra mile for your customers, then you should probably look into getting some extra help around the place, which leads into the next of our franchise best practices.
Hire Help That Makes a Difference
Even if you start off as an owner-operator, as things go well with your franchise, you’ll get to realize you can’t do it all yourself. This is also a given for operations that start out needing staff, to begin with. One of the most important roles in franchise business management is how you hire and maintain your human resources. Finding the right fit, knowing what you’re looking for and bringing in the skills that really fill a gap in your business are essential as you drive for business success.
Screenmobile has a System
Everyone wants success for their franchise business, whether they’re the franchisor or the franchisee. However, getting there takes a lot of hard work and a lot of good planning. Following franchise best practices can give you a head start on creating a business that will prosper for a long time, though the focuses are naturally different for the two sides of the system.
If you’re interested in joining a franchise system with one of the best renewal rates in the country (99.5% on 10-year franchise agreements) that’s excellently placed in a booming industry with no national competitor, then why not consider becoming a Screenmobile franchisee? To find out more about joining our successful team of franchisees, you can read more here or talk to our office.
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