The Right Recipe to Grow Your Business by Franchising


Food for thought — 5 tips on franchising success.



Some micro-business owners like their situations and don’t want to grow. Most entrepreneurs want to expand. If you, too, want to grow and if you use the right methods, your company can grow profitably.

Also, when there’s no cash, you can organically grow your business.

A growing business can also become an attractive target, if you want to sell. (Whatever the goal, it’s always best to have an exit strategy.)

Apolonia restaurantMeantime, mega growth requires mega capital.

One alternative to worrying about mega capital is to franchise.

Franchising can provide the capital to fuel growth.

You don’t need nearly as much cash on hand for facilities, products, services and talent.

Of course, you’ll need more than passion.

You’ll need a strong business model that’s applicable in various regions and locales.

To entice people to buy a franchise, in easy-to-understand terms you’ll need explain several benefits:

  1. Your business product/service utilities
  2. Your unique value propositions
  3. Know who are your prospective customers
  4. Explain how your business can help a franchisee to make money
  5. Your business as a turn-key operation without requiring highly technical skill sets

You’ll need compelling messages. Demonstrate that in buying a franchise from you, a franchisee will drastically shorten the time en route to profits without all the uncertainty for success.

Also, consider:

1. Get good counsel

Your strength as an entrepreneur – in being independently strong-minded – can also be a weakness.

So you’ll need quality counsel – legal, financial, marketing and franchising expertise to lay a strong foundation for success.

The details are endless. Just to give you some ideas of what to anticipate: There will be considerations in franchising pricing, fees, contracts, branding and protection for your intellectual property.

2. Make certain you have strong human capital 

One mistake would-be franchisers make is not having a strong management team with an effective human resources program.

They don’t give enough attention to establishing a strong human-capital foundation. That includes the right people for planning, operations, technology and financial.

You won’t enjoy long-term sustainability if you don’t have quality people with a vision and fortitude for growth. That also means creating new products as warranted and being adaptable to changing conditions in your marketplace.

3. Recruit only quality franchisees

The franchising process is analogous to recruiting key talent. But in franchising, in a sense, we’re talking about a long-term partnership with you as the majority partner. You don’t want to mistakenly sell to franchisees who won’t be suitable for your company.

They have to agree – but eagerly comply and follow through – with your policies.

In effect, they’re your image in the community. They’re your ambassadors. They have to present themselves with a positive appearance and outlook with a dedication for community service. In this day and age, branding should include cause-related marketing. It’s the right thing to do, and it provides a competitive edge.

Many company owners are so anxious to sell franchises, their criteria for franchisees is too simple – they only look for people who have a healthy net worth and cash to buy.

But more is involved. You’ll want to sell to intelligent people with common sense, folks who are self-motivating to work hard, and who will enthusiastically follow your game plan.

They have to be motivated and skilled to provide a great customer experience for repeat business and word-of-mouth advertising.

4. Don’t give away your power

Avoid the pitfall of giving too much autonomy to your franchisees. Flexibility is important because market conditions in various regions can differ. But a number of companies have suffered unnecessarily because they give too much marketing authority to their franchise co-op groups.

That’s why such managements have had countless battles with franchisees – in all their regions – regarding the expenditure of marketing dollars and branding. Believe me it can be a nightmare. It’s happened to well-known brands, including the world’s largest franchise, Subway.

5. Support and training

It isn’t enough to provide a great game plan for each franchisee. Your support and training have to be more than adequate. Both have to be exemplary and ongoing. By the same token, you’ll have to listen whenever there are foreseen developments.

Certainly, this isn’t a complete list, and very situation is different. Indeed, you’ll have challenges but you’ll succeed if lay the right foundation and are prepared to continuously improve as conditions warrant.

From the Coach’s Corner, here are additional expansion tips:

Many Managers Aren’t up-to-date on Opportunities in Emerging Markets — Seventy-six percent of business managers at global companies don’t have information for their needs – even though it’s necessary for productive decisions in expanding into emerging markets.

Growth Strategies to Successfully Expand into New Markets — So you see opportunities by expanding into a new market. Whether you’re expanding across town or into a different region, there are risks to anticipate in alleviating any uncertainty.

Buy a Business to Grab Market Share but Study 10 Financials — One of the fastest ways to grow is to buy a competitor or to acquire another business. But you must exercise due diligence in 10 steps.

“If you can believe it, the mind can achieve it.”
-Ronnie Lott


__________

Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy Apolonia at www.freedigitalphotos.net

Fast-Food Restaurateur Shares Secrets for Success

How a restaurant franchise rocks.

Franchising is big business. A published report indicates one in 12 businesses is a franchise. it’s a profitable way to grow your business.

In the aggregate, franchises provide jobs for 14 million Americans. It’s an accepted business model for people who want to be in business, but who need business-model support.

To be successful for either side – the company or franchisee – it takes commitment and discipline.

Companies have to be diligent about selling to the right franchisee – someone who has the character and tenacity to successfully follow a game plan and be committed to community involvement. That’s one reason for MacDonald’s success. It’s been estimated MacDonalds only selects 1 percent of the people who apply for a franchise.

On the other hand, prospective franchisees have to pick the company with a strong game plan.

Quiznos appears to have picked the right person in Seattle’s Pioneer Square, located near Safeco Field where the Seattle Mariners play. He’s 30-something Victor Twu, who’s also a jazz musician and big-time Mariners’ fan. He owns a second location on Westlake Avenue in South Lake Union.

Note: His customer service and attention to detail caught my eye. My other half and I have been lunchtime customers for more than a year off and on. Sometimes, months would go by before we returned to his establishment. But he always remembered us and our favorite menu items.

He didn’t pressure us to try other menu items, which most restaurateurs try to do. They think it insures long-term customer loyalty if customers sample all the menu options. That’s true in some cases, but some customers have specific reasons for patronizing a restaurant at lunchtime, and don’t want to be bothered. In my case, it’s the location, tasty sandwich, quick service and being remembered as a customer.

So it’s helpful if restaurateurs know when and whether to lobby customers. And the savvy Mr. Twu seems understands human nature. What makes him tick?

Here’s an edited interview:

Q: What’s your background?

A: My educational background is a degree in music from the University of Washington. That said, as a musician, I gained many years of experience in the hospitality and restaurant business. But prior to my current business, I’ve had no management or business experience.

Q: Why did you go into business?

A: I decided to go into business when I was at a crossroads. I knew I didn’t want to make a career out of teaching music and taking whatever gigs I could – I wanted to play and write music because I enjoyed it. So I did consider going deeper into my education for music hoping to attend a good school in New York (the “Mecca” of jazz). Then I remembered how much I hated school, probably ever since third grade. So what about my own record label? The riskiest most unprofitable industry to get into? No. I figure I was ready to get to work. I knew I was willing to work hard and if I am going to do so, I might as well do it for myself with these goals in mind: Comfortable living, growth in knowledge and skills, and eventually gain the time and space I need so I can concentrate on music and also do a little traveling.

Q: What’s your feeling about Quiznos’ value-pricing strategy?

A: Quizno’s new everyday lower price strategy is a smart idea based on other lower price models. Market research has shown that most people believe Quiznos has superior food compared to similar brands but are not as likely to visit more often because they think it’s too expensive. The idea is to drive more volume with frequent visits and to gain new customers as well.

Q: What are your challenges?

A: Consumers are very low in confidence and this has an effect on selling sandwiches as well. People are spending less per transaction in my restaurant or visiting rarely. Not to mention, there are fewer customers due to layoffs or offices closing or lower occupancy in buildings or whatever. It doesn’t matter; the fundamental ways to operate are still the same. Each guest must get friendly prompt service and enjoy a satisfying lunch day in and day out and now I’m giving everyone a good deal as well! I’m also trying to grow my business through catering and delivery – this is a critical component to grow my business.

Q: What advice would you like to offer?

A: If you are considering being your own boss at one point you should 100 percent decide either yay or nay. Be prepared for long hours and hard work. I believe being a good example and very team-oriented is a good way to go. Nobody wants to work for a lazy dictator. If you are indifferent to your employees, they will be indifferent to your customers. Also be prepared to be number one, be the best at your craft and exude this confidence. Be prepared to enjoy mental and emotional growth and hopefully financial freedom!

Postscript: He’s apparently achieving his goals. I stopped by recently and inquired about Victor and an employee said he wasn’t at the store – he was traveling.

Go Victor and go Mariners!

From the Coach’s Corner, one cool way to make money and to feel good about your business is cause-related marketing. For more information, see: Cause-Related Marketing Can Increase Sales by Double Digits.

“To be successful, you have to have your heart in your business, and your business in your heart.”

Thomas Watson, Sr.

__________

Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.