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Beyond the First Step of Franchising

Extras you can offer to make your franchise system stronger and more attractive.

Mark Siebert

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One of the main reasons companies choose to franchise is the extremely low cost associated with aggressive growth. Since the franchisee typically supplies all the working capital and pays for the right to do so, a new franchisor need only invest in the appropriate legal documentation and an operations manual, and they’re ‘in the business’ of franchising.

Of course, successful franchisors know there’s much more to it than that – especially if they want to grow rapidly. These franchisors realise that getting into the business of franchising means getting into a completely new and separate business, and they must invest in that business accordingly.

It Starts with the Customer

The key to success in any franchise system is, and always will be, the success of the franchisees. With that in mind, one of the most important things for a new or established franchisor to do is to constantly strive to improve the value proposition at the consumer level.

It’s really pretty basic. The more you can do to improve the core value proposition to the consumer, the better each franchisee’s financial returns are likely to be. Successful franchisees need less in the way of support and pay the franchisor more in the way of royalties than their unsuccessful counterparts.

At the top of the list, from a consumer perspective, is brand advertising and marketing. The better the marketing, the better the franchisee’s profit from increased sales and, perhaps, margins. Additionally, the time you spend on marketing allows the franchisee to be free of these concerns, and more able to focus on the core issues of operations and customer service.

So, your first order of business may be to ensure that you have great consumer marketing materials. A qualified consumer advertising agency is often an important early ‘hire’ for a franchisor – especially if you have done much of the work in-house in the past. This agency will almost certainly be different from the agency that’s needed to help the franchisor sell franchises.

A good PR firm should also be on the fast-growing franchisor’s wish list. Most people don’t realise that 60% of the stories they read on a day-to-day basis are placed by PR firms – only about 40% are ‘hard news.’ And while PR is something that a newly hatched franchisor may initially try internally, an internal PR function will never be able to fully match a good PR firm in crafting the story angle and selling (and I do mean selling) the idea to writers and editors with whom they have a relationship.

Lastly, a franchisor should be careful to continue to invest in research and development. This could result in new products, new menu items, new services, new delivery methods, new advertising or new suppliers – but the fact is the world doesn’t stand still.

Help for the Franchisee

Beyond the consumer level, you can strengthen the franchise system and make the franchise offering more attractive by offering additional benefits to the franchisee.

One of the biggest benefits that can be offered to franchisees by the franchisor involves the use of the franchisor’s increased buying power. Even a small chain of stores can generally purchase more effectively than a single unit can, and larger chains can bring substantial volume discounts.

These discounts can be provided to the franchisee in a variety of means. Some franchisors choose to provide this benefit in the form of negotiated discounts, others in terms of rebates, but the value is unquestionable. In the case of one franchisor we know, the rebates from vendors have approached the average royalty paid by the franchisees. Now that’s a value proposition!

Other franchisors try to help their franchisees focus on either sales or daily operations by taking over the back room responsibilities that might otherwise occupy the franchisees’ time. For example, some franchisors will take responsibility for ad placement, Internet site management or accounts receivable collections.

Franchisors in the advertising or publication industries often assume responsibility for printing, editorial content and even ad design. These services free the franchisee from much of the day-to-day operational routines that their competitors labour under, allowing franchisees to spend more time in productive pursuits (eg sales).

Likewise, some franchisors provide services to the end consumer to improve sales. One example of this can be found in some direct sales franchisors which provide consumer financing to the customers of their franchisees – making the sale that much easier while creating a new profit centre.

And of course, anything you can do to set your franchise apart from the competition will help. Some of these differentiating factors might include strong internal communications programmes, franchisee intranets and the development of an active Franchise Advisory Council.

Improving Quality Control

Top franchisors know that brand maintenance means more than just marketing. It also means quality control.

The best franchisors typically have field support personnel whose responsibility is to visit franchisees in the field and determine if they’re living up to brand standards. And while you may be reluctant to exercise these rights aggressively, more mature franchisors know that often the biggest advocates of strict quality control are the best operators among their franchisees – who don’t want to see their brands undermined by a sub-par operator.

Beyond field support, the best franchisors are huge advocates of training. While training with early-stage franchisors can sometimes be informal, larger and faster-growing franchisors will take this a step or two further, by developing formal training programmes that lay out in exact detail the knowledge that must be learned by each franchisee and/or their personnel.

These training programmes are designed to provide knowledge in a consistent manner, specifying on an hour-by-hour basis exactly what will be taught and learned, then creating accountability for this learning through the use of various testing vehicles.

Ultimately, of course, it all reverts to your ability to structure a programme that delivers value. If franchisees succeed in delivering value to the customer and you succeed in delivering value to the franchisees, you’re much more likely to create the win-win-win relationship that’s the hallmark of successful franchising.

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Sell Franchises Faster

Another way to make a franchise organisation stronger, of course, is to make it bigger and faster. Assuming that quality doesn’t suffer in the process of growing the company, faster growth can equate to increased economies of scale when it comes to advertising, public relations, purchasing and brand recognition.

The first thing you need to understand in this regard is that franchise growth is not something you ‘stumble into’ or something that happens by accident. Franchise growth, at least in the early stages, comes about almost exclusively by design. The four pillars of franchise growth are a strong concept, adequate marketing expenditures, professional marketing materials and competent sales people.

Start with the marketing materials. Ask good franchisors what business they’re in and most will tell you, ‘selling and servicing franchisees.’ Yet many of these same executives spend a small fortune on consumer marketing and give short shrift to the marketing of franchises.

A good brochure is an essential beginning, not only to sell the franchisee but also to help sell the franchisee’s banker, accountant, lawyer, spouse and his know-it-all Uncle Charlie. In fact, virtually all fast-growing franchisors produce a full-sized brochure (similar in size and quality to an annual report), perhaps a two- or three-fold flier (for in-store use, direct mailings and trade shows), and, of course, a state-of-the-art web page.

As a franchise consultant since 1985, Mark Siebert founded the iFranchise Group, a franchise consulting firm, in 1999. During his career, Mark has personally assisted more than 30 Fortune 1000 companies and over 200 startup franchisors. He regularly conducts workshops and seminars on franchising around the world. For more than a decade, Mark also has been actively involved in assisting U.S. franchisors in expanding abroad. In 2001, he co-founded Franchise Investors Inc., an investment firm specializing in franchise companies. He's on the board of directors of the American Association of Franchisees and Dealers and the board of advisors to Connections for Community Ownership, which encourages minority business and job development through franchising.

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Company Posts

Spur’s Got A Taste For Success

With eight brands across five countries, the Spur Corp’s secret sauce to success has all the best ingredients — most importantly, its franchisees. Sacha du Plessis, Group Marketing Executive at Spur Corporation, explains the company’s 51-year journey in creating some of the most popular places to eat the world over.

Nedbank Franchising

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What is the biggest contributor to Spur’s success?

Since the beginning, we’ve made an unwavering commitment to run restaurants that are operated by entrepreneurially-minded owners who put the customer first. Customer satisfaction is one of Spur Corporation’s most important value drivers, we partner with people who ensure we retain and grow a loyal customer base. We seek to work with franchisees who take pride in the training of their staff and prepare food with passion.

This mindset has been alive for over 50 years in our staff and franchisees.

Please share some of the challenges Spur encounters as a franchisor?

We have a sizable franchise network and a big priority is to ensure that we meet customers’ expectations in every single franchise they visit. Another challenge is finding the best franchisees to partner with, people who are aligned with our company values and customer orientation.

In terms of growth, it is sometimes challenging to find the correct locations per brand and to ensure the rental is at a level where it’s sustainable for the franchisee. The management of our marketing communication to ensure we remain relevant and distinctive in an ever changing landscape can also be a challenge.

Related: A Three-Pronged Approach To Franchise Success

Name a few of the qualities you look for when selecting franchisees?

Our business was built on a highly focused customer orientation and centred on a love for food. Our franchisees need to be focused on the customer: Pleasing the customer, meeting the customers’ needs and being willing to spend large amounts of time in growing a business that essentially is the hospitality industry and is really about people. Our franchisees are people who have an appreciation for, and love, food as well as serving their local community over and above their product.

Why is Spur a solid investment for entrepreneurs seeking to pursue franchising?

We’ve invested greatly in growing our brand over a long period of time. Spur was founded by our Executive Chairman Allen Ambor in the spirit of entrepreneurship. Over the past 51 years, we’ve built a track-record of comprehensive operational, finance, marketing, IT, training, procurement, distribution and development support. Our marketing approach grows sustainable brands in a considered and well researched manner.

Our customer scope is broad, so while our main brands are focused on the wider South African market, we also have niche brands. This track record reassures the franchisee and broader market about Spur Corporation’s credibility.

What kind of support can a franchisee expect when joining Spur?

Franchisees can tap into expertise that’s been built up over five decades. We provide franchisees with the most effective tools to help manage and sustain their businesses successfully. Our operational support is wide-reaching and includes access to procurement, development, logistical as well as IT support. Skills development is one of the most important ways in which Spur Corporation supports its franchisees to run successful businesses.

Marketing support enables franchisees to actively identify opportunities and get assistance in developing and implementing bespoke marketing plans for each restaurant. Most importantly, when a franchisee joins Spur Group he or she gets access to cutting-edge management know-how from an experienced team of people who are passionate about our business.

Related: Nedbank’s Full Service Offering for Franchise Owners 

Why is it important for successful franchises such as yours to have a strong banking partner and how does it benefit the franchisee?

Buying into a brand is a substantial investment for a franchisee, so they need a banking partner that will help with financial planning and running the business. Nedbank has built relationships with franchisees while helping to open and maintain their businesses.

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Company Posts

Muscle And Grill Is Your Daily Chef. We Provide Fresh, Nutritional Food At Affordable Prices

It isn’t always easy to stay in tune with both body and mind. We do all the prepping for you so that you can keep up your pursuit of greatness.

Muscle and Grill

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Vital stats

Muscle and Grill is a healthy fast food establishment based in South Africa. In the face of modern South Africa, lives spent on the go require a fuel to match their aspirations while maintaining a delicious, fast and fresh service.

As our lives swirl into life’s vast depths of opportunity, our bodies are often the product of poor health habits, while trying to keep on the move to achieve our goals. Muscle and Grill challenges this. We want to be able to support the South Africa of tomorrow by offering the food your body needs to keep reaching new heights – to keep pushing the boundaries of accomplishment with health food convenience.

At Muscle and Grill we’ve got you covered. We provide nutritional fast food that is fresh and affordable. We have your health at heart. You could start your day off with some free-range scrambled eggs or fresh oats – for lunch a mixed bowl of rice, protein and fresh vegetables – or to round off your day, replenish your mind and body with a hearty health-infused burger and all its wholesome goodness. We have not forgotten that home constitutes a hungry family who have all been active, so grab a lean beef pasta salad with some greens on the side to go.

Related: SA Fast Food Franchising On The Rise

It isn’t always easy to stay in tune with both body and mind. We do all the prepping for you so that you can keep up your pursuit of greatness.

About us

It was once said that great ideas are born from ones’ frustrations. That is exactly how Muscle and Grill came about. Having no real on-the-go option to stay healthy, or having the time to prepare to be healthy, became a huge frustration for us. We struggled to find enough hours in the day to keep up with a busy lifestyle and still eat healthy while on the move. Our work came first and our lifestyles suffered.

The vision for Muscle and Grill is to make it possible to stay healthy on the go. We want healthy food to be easily accessible for all walks of life.

Our mission is to provide quality, healthy fast-food. The food we provide is delicious and will keep you coming back for more.

Concept

muscle-and-grill

Muscle and Grill works on an almost self-service basis. The point of sale system is customer operated where you can select what meal you would like to have. Once payment has been processed electronically the kitchen staff will receive the order and prepare it to spec. Muscle and Grill will be a completely cashless business, making it super-efficient for consumers and business owners.

Related: 3 Crucial Considerations For New Multi-unit Franchisees

The concept of Muscle and Grill is partnered with Puré Frooty. Puré Frooty is a self-service smoothie bar which prepares smoothies for you at the touch of a button. You can have a store with or without a machine – the choice is yours. Both concepts look to promote the idea of healthy living on the go.

We’ve looked to compliment our values by looking after that which grounds us. Our packaging and utensils are all eco-friendly, as we believe ‘going-green’ is not just a choice of eating but of the environment too.

So, when you are ready to join the next revolution in the fast food industry contact Muscle and Grill at info@muscleandgrill.co.za or visit the website at www.muscleandgrill.co.za to inquire on our franchise options today. Achieve your goals, stay on the move and look after yourself through Muscle and Grill.

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Company Posts

Nando’s Is Firing Up The East

Carlos Duarte has been part of the Nando’s brand since inception. When his brother Fernando co-founded the flamed grilled chicken brand in 1987, Carlos soon participated in its success and today owns four highly successful franchises in Johannesburg — three in the east and one in the south. Here’s how it all began.

Nedbank

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Vital Stats

  • Player: Carlos Duarte
  • Franchise: Nando’s
  • Position: Franchisee
  • Visit: www.nandos.co.za

What were you doing before becoming a franchisee?

I was in the audio visual technology field, as an employee. Then I joined Nando’s as an assistant manager in the Savoy and Rosettenville corporate stores. Franchising was my first experience of entrepreneurship.

Why did you decide to become a franchisee?

When my brother, Fernando Duarte, launched Nando’s in 1987, I noticed its quick growth and wanted in on the action. Being assistant store manager prepared me for when the opportunity to run my own store came along soon after.

What prompted you to partner with Nando’s?

I joined Nando’s in 1991 as a joint venture partner. At the time, Nando’s hadn’t yet franchised its operations, and the JV partnership meant the brand owned 51% of the business, while I owned 49%. My first franchise store was in Edenglen in 2001.

Related: (Watch) Why Nando’s Is Clucking Its Way To The Top

Describe some of the challenges of running not one, but four franchise locations

At the Edenglen store, we initially battled with sales and getting feet into the store. To be honest, I think the area was overtraded at the time, so it wasn’t the best location. Since acquiring the store in Lambton, Germiston, another in Greenstone and a third in Comaro, I’ve learnt to be cleverer in how I do things — and how I handle some of the same challenges — and learn every day from the brand itself.

Name some of the benefits you’ve experienced as a Nando’s franchisee

Nando’s is 31 years old this year. We’re in 30-odd countries worldwide with thousands of stores across the globe. As franchisees, we leverage off the dynamism of an operational business that’s known for its marketing — customers talk about our ads and they love our food.

What kind of support do you receive from Nando’s as a multi-unit franchisee?

Besides the popular marketing campaigns that attract customers, Nando’s has an extensive training manual along with a skills development training consultant who comes to the store for two days to help staff understand and implement it. The training is really effective — it has to be as this industry involves a very high turnover of staff and new skills need to be taught often.

Why is it important for a franchisee to have a good banking partner?

As a franchisee, your bank should understand your business — from operating costs, to overdraft needs and revamping expenses — so it has cash available for loans that can be approved quickly, with minimal hassle. On the technical side, a reliable mPOS device is imperative, especially for us, because 30% of our sales volumes are from home and office deliveries. It’s a fundamental method of payment every bank should provide its customers of a similar nature.


What advice do you have for budding franchisees on seeking out a good franchise brand and banking partner for their business?

  • Do your research to ensure you’re partnering with a brand that is established, well-known and expect to pay a fair price for that franchise.
  • Be aware of how the franchise brand is perceived in the market and what location opportunities are available to you as a franchisee.
  • Choose a banking facility that always has the funds available to grow your business.
  • Ensure the bank understands the brand’s business model and where you’re falling short.

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