Positioning for Success in a Rapidly Expanding Segment

The landscape of the business world shifts over time and so should yours. Change is the only constant on which you can depend.

By Dara Maleki

“Franchise.” To many, the word conjures images of a complex and complicated business model. True, it can be quite an undertaking, but when you realize that someone else sees the potential and value in your business, and wants to be a part of it, the rewards outweigh the challenges. With growth comes structure, guidelines, foundations and principals that are now shared with people who are relying on you to be successful.

The Dream Team

Arguably the most important aspect of a healthy franchising model is the development and growth of your team. Having a strong team in place better equips you to run your own locations, promote sustainability, and support your franchisees’ growth and success. There’s no exact science, but there are key positions that can help you reach your goals as a franchisor.

Finances

Having a trustworthy accountant or finance director can not only improve your operational costs, but allows you to forecast certain obstacles that might stand in your way over time. Businesses often fail because they cannot properly allocate funds to areas that will make their business grow. Budgeting is the most underutilized yet overly helpful tool to keep your business moving in the right direction.

In the same way you would plan out the construction of a building or a home, there are core foundations that need to be established at the beginning of a project. Your foundations may be much different from those of your neighbors, but identifying and setting them early on will put you on the right path to success.

A franchise is the same way when it comes to finances. You need to have plans and structure in place to get started, but more importantly to get where you want to be. You should have checks and balances in place so your spending is allocated in ways that make the most sense for your unique business model.

For example, if your business model focuses on customer service, don’t skimp on your labor costs. If you want to be a $10 million company, allocate enough funds towards marketing initiatives that support scale.

As you begin to franchise and your company grows, there has to be an end goal in sight. Do you want to go public? Do you want to sell it off? Knowing, and positioning yourself financially for, your desired outcome will help create benchmarks and milestones along the way to achieve your goal.

Operations

You have to have your business structured and operationally sound. There is no other way around it. The old saying “running like a well oiled machine” might be cliché, but it is tried and true. Just as you have a financial blueprint for your money, you need one for how your business operates. There is no way to successfully grow a company and sell franchises without proving that your business can run smoothly. We can all probably agree that successful businesses do not just run themselves. It’s the people you have in place who will help you get to that point.

Having tools such as an operations manual leaves little to question for what needs to be done in order to operate at full potential. Anytime there is something in question, there should always be a resource to reference. Although the work on the front end is tedious, stressful and cumbersome, the work you put in now to establish the grounds on how your business operates will empower your team and employees to run all its facets. Your time is better spent growing your franchise rather than micromanaging daily issues at a store level.

Marketing

The value of marketing is often overlooked but it is essential to creating a successful business. Understanding your target market allows you to successfully plan marketing milestones and focus on those who want your product or service. The National Football League is not going to place a commercial advertisement on the Lifetime Network because its viewers don’t fit within the NFL’s current and target audience.

Overcomplicating and overthinking your marketing plan can muddy the waters and cost you a lot of money with little or no return. Keep your goals simple and clear. If you want to market to 20 to 30 year olds, you might spend a greater amount on social media or web content rather than traditional print advertising. Understanding your consumer is the only way to generate a real return on investment.

The Evolution

The landscape of the business world shifts over time and so should yours. Change is the only constant on which you can depend. What’s hot now--trends, fads, and everything in between--affects your business in one way or another. That doesn’t mean you have to re-invent the wheel every time something in your ecosystem drastically changes. However, understanding those deviations and reacting to them will take your business from good to great.

When you look at the history of any major franchise--20, 10 or even five years-- you will see differences. They might not be as drastic as others, but all have evolved their model in some way. It could be a re-branding, a design change within their stores, or even as much as a complete product or service overhaul. Embrace change, react to it, and mold it to fit your business model.

The Culture

Some eat, sleep, and breathe their business or job. The reality is that not everyone does. The culture that you establish from a very early date can have your employees either loving or hating their jobs. Not everyone you employ is going to love his or her job forever, but creating a culture that encourages creativity and self-expression allows you to attract the right employees.

Happy employees translate directly to sales. The first customers you have are your employees and team. Yes, you are selling a service or product; but, first and foremost, you are selling an experience.

Just like your employees, your franchisees are buying an experience. You are in the business of selling businesses, but it’s the feeling they got when walking into one of your locations or while interacting with one of your employees that resonates most. Your outward appearance is a direct reflection of your inward values and beliefs.

Dara Maleki is founder of The Pizza Press. Find him at fransocial.franchise.org.