I’m often asked, ‘What factors most influence the success of a franchise company?’ My answer is invariably the same: concept, capital and management.
Of course, the concept has to work to begin with. The franchise concept has to be replicable. It has to provide adequate returns. It has to be differentiated from competing concepts both at a franchise and consumer level. And it has to have ‘sizzle.’
While franchising is a low-cost means of expansion, it’s not a ‘no cost’ means of growth. You will need to develop a strategic plan, legal documentation, marketing materials, operations manuals and training programmes. You’ll need to spend money on advertising. You may need to hire staff. All of this takes capital.
Good Management is Key
But of all the criteria for success, by far the most important is management. Good management will improve and differentiate the concept and ensure that it provides adequate returns. Good management won’t begin with franchising undercapitalised, and – if necessary – will raise the capital needed to grow. But there’s no cure for bad management.
No business, no matter how simple, is foolproof. Bad management can (and will) find a way to ruin even the greatest business. So what separates the great managers from those that fall by the wayside?
It Starts with the Vision
Virtually every successful franchisor starts with a vision of the future and the role their company will play. A successful franchisor understands the dynamics of the marketplace, the competitive situation and where they fit into the marketplace. More important, the franchisor will have an intuitive grasp of where the marketplace is heading and how that’ll provide the company with an opportunity for growth.
Not all visions are grandiose. We’ve worked with entrepreneurs whose vision extends only to their local market. The key isn’t in how big the vision is, but what the viewer sees.
The best entrepreneurs seem to have an uncanny ability to see the chinks in the armour of their competitors, and see these chinks as an opportunity. In fact, many of the entrepreneurs I’ve met began their businesses after first having a bad experience as a consumer at one of their competitor’s places of business.
To the visionary entrepreneur, the service or product flaws that cause most of us to mumble and grumble look like a gaping hole through which he can drive a new business model. They see that hole and ask, ‘What if…?’
Of course, vision without execution is simply a dream. And this is often where the marketplace will separate the wheat from the chaff.
Entrepreneurs, by their very nature, never stop. They can’t stop. Their minds are almost ceaselessly churning away at how they can improve their business and gain a
Unfortunately, for some, that translates into idea overload. These overloaded entrepreneurs will find themselves chasing every new idea, usually to the detriment of the few great ideas that deserve execution.
The best franchisors complement their vision with a laser-like focus on making it happen.
It’s All About the Sale
Vision alone is never enough. You must translate that vision into reality in order to achieve success. And that starts with the sale.
Regardless of whether you’ll be selling franchises, you must be a good salesperson, as there are many other sales to make along the way.
First, you’ll have to sell your family, spouse or significant other on a venture many will view as speculative at best. After all the struggles associated with building the business, you will need to go back to these same people again and sell them on the merits of investing R400 000 to R800 000 or more in the development of a franchise programme before selling a single franchise.
And of course, along the way, you’ll need to sell customers, bankers, investors, lawyers and others on the merits of the business that’ll be franchised. You’ll need to sell key employees on why they should join a fledgling company rather than one of your better-established brethren – which probably offers a better salary, benefits and job security. Most important, as a new franchisor, you will need to sell franchises.
To some extent, the early franchises are actually the easiest to sell. Often there’s pent up demand for the franchises. And there’s the allure of being one of the first ones in on an exciting new concept and the opportunities to get prime territories.
But, in selling the first franchises, you have to overcome a number of significant objections, including the lack of size, capitalisation, buying power, name recognition, significant staff and a long-term track record. There are ways to overcome all these objections, and the skilled sales person should have no problem getting past them, but even the best sales person can’t fake passion.
The best sales people are passionate about their concepts. You must start with a deep-seated belief that what you’re offering is truly the best alternative. And you must be able to sell your vision of the future to many diverse audiences.
An Unquenchable Thirst for Perfection
Ultimately, the development of any great franchise is about the development of a great brand. And great brands are a result of consistency in execution.
Ray Kroc, who first led McDonald’s franchise efforts, is said to have picked up trash in his franchisees’ parking lots. His message came through loud and clear.
The best franchisors are passionate about quality. While they may be open to innovation, the best franchisors are uncompromising when it comes to brand standards. They set these standards and are willing to spend the time and money to ensure these standards are strictly enforced.
They also know that to be successful as a franchisor, they need to be certain that their franchisees succeed. Successful franchisees help to sell franchises, cost less to support and pay more in royalties.
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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