While the vast majority of young franchisors would be happy if they were to open 100 franchises, for others, nothing short of world domination will suffice.
If you’re someone with grander designs, you might well ask, “What does it take to become the next McDonald’s?”
Making it to the top of the world starts with the concept. The franchisor hoping to rule the world must start by breaking new ground and not following in the steps of others.That doesn’t mean your concept must be the first to the market – although that can certainly help.
Uniqueness may be as simple as a new recipe, a fresh marketing campaign, a proprietary product or a new twist on an old service. And ideally, your unique selling proposition involves staking out a competitive position against which your competitors cannot or will not respond.
2. Start With a Plan
Once you decide to franchise aggressively, you need to realise that success in franchising does not happen by accident. Success is designed from day one and happens because companies execute according to a plan.
Good planning starts with an understanding of the competitive landscape and bench-marking your closest competitors. Every franchisor has competitors and it is your job to know how your prospective franchisees view you in relation to them.
You need to properly position the offering, structure the business relationship and determine whom to hire and when. You should then subject these decisions to financial analysis to ensure you have the resources necessary to implement your well-laid plans.
3. Build in Value
In order to be the next McDonald’s, you need staying power. That means building a strong value proposition into the offering. Larger, better established franchisors will have substantial value in their brand and the years of advertising that went into creating it.
For newer franchisors, however, the brand itself, at least short-term, is likely to be a lesser part of the value proposition. You need to concentrate on other elements of the value proposition: research and development, purchasing, back room services and other pieces of ‘value’ that cannot be obtained by an independent business person.
4. Add Sizzle
Of course, if you want to be the next McDonald’s, you are going to have to start by selling a lot of franchises. And to do so, you are going to need to motivate people to investigate – and ultimately buy – your franchise.
Call it what you will – sizzle, sex appeal or pizzazz – you’ll need it to generate interest in your franchise if you are going to really hit it big as a franchisor. While sizzle is, at least in part, a function of the concept it surrounds, the best thing you can do is put together a first-rate franchise marketing plan.
5. Capital Makes the World Go Round
Of course, the best laid plans of mice and men often go awry, especially if you don’t have the capital to implement them. While franchising is a low-cost way of growing a business, it is certainly not a ‘no cost’ means of expansion.
You need to secure adequate capital to fund your initial legal and development costs. Beyond the basic start-up costs, you need to fund a budget for franchise marketing.
There is no worse mistake than taking a one metre leap across a two metre ditch. That means you must start by understanding your capital needs and then ensure this capital is available to you.
6. Select the Right Franchisees
Great franchise systems have great franchisees. Even the best franchise concept will fail if its franchisees are not capable of running a profitable business and delivering a positive experience to their customers. Selecting quality franchisees is most critical as you’re seeking to gain traction in the market. Financial capability is clearly a critical component to success, but other characteristics are equally important.
Franchisees must possess a passion for the brand they are representing, have the ability to lead their operations team and be willing to filter their own personal interests through those of the entire franchise system. An excellent franchisee will realise that profits can only be maximised if their interests are aligned with those of both the franchisor and other franchisees.
7. Make Controlling Quality ‘Job One’
Once you have found your franchisees, one of the most challenging aspects of hyper-growth is controlling quality. But to maintain your value proposition at the consumer level, protecting brand standards must be at the top of your priority list.
If you’re opening a handful of franchises over the course of a year, you can often maintain quality without a heroic effort. But the faster you choose to grow, the more important it is for you to develop the systems and tools necessary to ensure the consumer receives a consistent experience. Moreover, that means a commitment on the part of management to inculcate these standards within the organisation.
8. Make it Work
Of course, no matter how unique the idea, it still has to work. And ultimately, that means return on investment. Nothing sells franchises as fast, especially in today’s viral environment, as the reputation that a particular opportunity is a moneymaker. And nothing can derail a growth opportunity as fast as failing franchisees.
With that in mind, you need to work diligently to maximise the franchisee’s returns. Your first order of business should be to determine if there are ways in which the initial investment can be reduced. Not only does a lower investment improve returns from a percentage basis, but by lowering the bar, it also increases the number of franchisees in the investment pool.
At the same time, you must strive to aggressively manage the franchisee’s income statement. And while top line performance will have the most direct impact on your revenue stream, the expense side management will result in more successful franchisees.
9. Bring in the ‘A Team’
One of the most important aspects of any business is the development of the team responsible for growing it. Chances are, if you have built a successful concept and are about to franchise it aggressively, you’ll need an entirely new set of skills to make the transition from operator to franchisor.
Regardless of the business you plan to franchise, as a franchisor you will now be in the business of selling and supporting franchisees. And if it is your goal to expand aggressively, you will almost certainly be stepping outside of your comfort zone.
The easiest way to overcome this challenge is to bring in an experienced team. Often, the best route is to use a management recruiter who specialises in finding proven franchise talent.
10. Erect Barriers to Entry, and Plan for Change
Lastly, you must anticipate and adapt to changes in the competitive landscape over time. When McDonald’s first started franchising, it had a much more limited menu. It did not have Ronald McDonald. It did not have drive-thru windows. But it continued to adapt and thrive.
The more successful your company is, the more certain you can be that knockoffs will follow you into both the consumer and franchise marketplace. You must anticipate these newcomers and do everything you can early in the process to erect barriers to entry, to adapt to the new marketplace and to stay one step ahead of the competition.
Establishing barriers to entry can be as simple as being first to market and establishing a dominant brand position. Or it can be as complex as obtaining a business process patent. It can be a recipe, a product or an attitude. But if you have an undifferentiated product or service with low barriers to entry, your business will quickly become commoditised.
Of course, there are a thousand hurdles to overcome on the road to success, but with the right planning and enough time, your company could be the business that everyone emulates years from now.
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.
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.
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.
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.
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.
- Brand: Muscle and Grill
- Established: 2018
- Website: www.muscleandgrill.co.za
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.
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.
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.
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 email@example.com 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.
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.
- 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.
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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