Successful Franchisor Louisville KY
How to Be a Successful Franchisor
If you have a great business and are thinking about franchising it — you should know what it takes to be a good franchisor. The following list details some factors that typically translate into successful franchisors. In addition when you are buying a franchise it is important to ensure it is strong, and will remain strong. This list can also help identify great franchisors to work with. The following article is from JD Supra .
There are many factors that contribute to a successful franchise. Chief among these is having the right people in charge of the franchise. Over the years, I've noticed several other characteristics shared by successful franchisors. Obviously, adherence to the following list will not guarantee success, but it will certainly put you far ahead of the average new franchisor.
Franchisee Selection Process
Smart franchisors are very selective in establishing franchisee relationships. Your franchisees are the single most important factor in determining your success. You must make sure that they are financially, intellectually, and emotionally qualifed to run the business. You should never grant a franchise to someone that you would not feel comfortable hiring as a management employee. You should also investigate them as if you were hiring them as employees. Multiple Revenue Streams. In addition to standard franchise and royalty fees, franchisors can increase revenue streams from franchisees through sales of goods or services to the franchisees, such as required inventory and/or equipment purchases. Franchisors can also receive rebates or commissions from other suppliers which the franchisees are required or encouraged to use. Finally, rental income can be earned by leasing site locations to franchisees.
Successful franchisors offer more to their franchisees than just a trademark and a business model. They also offer services such as location selection and development services; complete initial and on-going training (inadequate training is one of the most common causes of franchisee failure); complete specs and systems communicated in a clear manner; procurement programs for equipment, supplies, inventory and services; advertising assistance; and research and development.
Maintaining System-Wide Uniformity
Maintenance of high and uniform standards throughout the franchise network is of signifcant value to the franchisor and each of the franchisees. It is important to the value of the system, that a customer receives high quality and consistent experience in dealing with each franchise location. Whether or not you are a fan of McDonald's, you can't deny the remarkably consistent experience in visiting a McDonald's in Chicago, Atlanta, or Tokyo. A franchisor must implement policies and procedures that help maintain standards by rewarding compliance and enforcing system standards by means of inspections and audits where positive motivation has not proven effective. The more &qu...