Taste Holdings brought Starbucks into South Africa in April 2016, within 18 months its footprint was already on six. The QSR and retail franchisor and licensee has subsequently said that its roll-out plans for the Starbucks brand in South Africa will be slow and considered. Its reason? Delivering a “quality” Starbucks experience.
But do you really have to give up successful growth in favour of excellent quality? Not necessarily, says Dave McDougall is senior vice president of QSR operations of NexCen Franchise Management, Inc.
“As the franchisor you want to work closely with those franchisees that are developing and growing to maintain quality and profitability for mutual success of both franchisee and franchisor.” he says.
How do you ensure quality across the board while adding new franchisees every second month? But encouraging multiunit franchising among your network.
1Realise that less isn’t always more
Proven franchisees are an excellent vehicle for growth because not only are they good enough to run more than one or even two franchise locations, but they understand profitability, have good business acumen, and best of all, they’re committed to and are passionate about the brand.
“A successful franchisee with the desire to expand provides a franchisor the most effective opportunity for growth. Those that have grown to five, 10, 20 or more locations are proven operators, passionate and good brand stewards,” says McDougall.
“As a franchisee grows the franchisor will realise that the support needs change from those just getting started or only having one or two locations.”
Successful multiunit franchisees don’t have to mess with your formula to make a success of their venture. They’re solutions-driven and see you more as a mentor and advisor, than a boss. They make things happen instead of waiting for them to happen. And they strive for quality and – sometimes perfection – every time.
2Encourage organic growth
In 2016 local fast food franchise Galito’s announced its intentions to embark on expansion in Pakistan, opening three new stores in the region within six to nine months, starting in September 2016.
“It was never about growing into a specific region – rather expansion has been a result of organic growth and a by-product of relationships, joint ventures and direct requests from specific regions looking for a franchise opportunity,” says Galito’s CEO Louis Germishuys.
The next stop is the US, he says. But organically growing your brand means understanding the intricacies of the market and implementing a risk strategy that will come in handy as a roadmap for navigating new markets without compromising on quality.
3Monitor new store performance
The 12 months of a new franchise location’s life are the most crucial, and both the franchisee and franchisor should make monitoring and measuring the new store’s performance a priority.
“As a multiunit franchisee continues to add locations, it is easy to become focused on the next opening and lose sight of those recently opened,” notes McDougal.
To avoid this trap, you need to have clear responsibilities for maintaining the quality of the operations and profitability of the new stores. If they’re not positively contributing as planned, you have no assurance of the stability and financial health of these locations.