Typical Characteristics Of A Company That Is Suitable For Franchising
The core of a successful franchise operation is the brand. Franchisors must have a brand that people wish to buy and be associated with. The brand should be recognisable, respected and appropriate for use across different geographic territories. There should be a strategy for continued investment in the brand.
A Compelling Sales Proposition
A company should have a clear sales proposition that is understood and easily communicated. Whether it be based on price, quality, service, availability or whatever – the proposition must be able to be consistently deliverable.
A business that has developed quality, consistent and documented processes for creating or delivering its products and /or services.
Product and Service Consistency
The products or services themselves do need not be unique or even best in class but they do need to be consistent in the quality v price v availability v desirability attributes that they possess and that are reflected in the brand.
Franchisors are not just selling a product or service, but a way in which business is carried out against a proven business model. A business that does not take decisions or implement activities consistently against agreed methods of working will find it difficult to satisfy the needs of a franchisee. As such start-ups, some creative businesses or businesses that haven’t developed their detailed business processes will struggle to find and then manage franchisees.
Proven Track Record
Although not impossible, selling a “concept” to a potential franchisee is a more complex task. Desirable franchisees will likely want to see a proven product or service delivered to a proven market before investing their money.
If a business is already able to operate independently in different locations, whilst using common processes and methods, then there is the basis to extend that model to a franchise operation.
Franchising is a proven business model that can bring about accelerated growth and fast-track market penetration.
Franchising is a proven business model that can bring about accelerated growth and fast-track market penetration. However, it is a strategy for businesses that clearly understand the basis of their success and are able to repeat that model again and again. For businesses whose success is based on brand development, consistency and organisational or process excellence franchising could well be the right strategy for growth.
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