Why is it that some franchises seem to expand so quickly and others can’t seem to get off the ground? In the franchise development world, you have the opportunity to see some “out of this world” ideas and business concepts. The really exciting part of working in franchising is that we are able to work closely with entrepreneurs who have more vision, insight and ability to innovate than anyone on the planet. We are confident that what drives the global economy is the small business owner and entrepreneur who is looking for ways to create, constantly looking for ways to build and always taking a positive spin on how to approach opportunities. Franchising is a nice way to keep your finger on the pulse of the global small business economy and to see what, who and how people are doing business. In most cases, what happens in the small business and franchise markets is what is coming to the broader market. On one hand, the franchise market has produced a multitude of amazing success stories, but why do some not scale as efficiently and achieve duplication of their brand through franchising?
When you franchise a business, you enter a new world of business, some business leaders just aren’t great at being a coach.
Just because an entrepreneur makes a fantastic product and excellent pizza, doesn’t necessarily mean they have the business skill set needed to teach, coach or mentor others. Franchising is a business where the franchisee invests in the business because they need advice, guidance and counselling from the franchisor. A Franchisor needs to be able to share and teach intellectual property to new franchisees and sometimes the entrepreneur can hold back the growth of the company if they are unable to communicate effectively to teach, train and sell the vision of the franchise model. Our direction to a business that is just starting to Franchise the Business model, do a hard self-evaluation, if you don’t have the skill set to do this, there are lots of professionals out there you can bring into your system to support your growth and be a leader within your franchise business.
Franchise Development is a Serious marketing and sales business
There are cases in franchise development where “Build it and they will come” holds true, but the majority of the time, it takes a concentrated effort to market, promote and sell the franchise. When you franchise your business, you now are tasked with the responsibility of sharing your vision and convincing other people that what you have to offer is worth the investment and offers value to them overdoing it on their own.
Franchise development is unique in that you are effectively selling “air” when you promote your franchise brand. This transition from selling a physical good, product or item to now selling an idea requires a good marketing plan, franchise sales process and resources to support these marketing efforts. Typically, this requires the involvement of franchise brokers or professional franchise salespeople who can assist the new franchise in going to market. The franchise systems that have success in franchising invest the time, money, and effort into franchise collateral materials, promotional tools and overall branding. The great franchise systems certainly have a look, feel and presentation that resonates with a potential investor and looks bigger than a “mom and pop”.
You Should have a Great Concept when you Franchise your Business
Good ideas are never easy to come by, but when you do find one, the process of franchising allows a business owner to leverage that idea and monetize the concept through growth and duplication into new markets. Some markets are just tough to the franchise when it comes down to it. If you have a QSR foodservice model and are considering franchise expansion, you better have a strong differentiator to be able to attract attention and draw interest from other foodservice franchise brands. In some cases, established and mature markets can be franchised with a good concept and a unique approach to the model.
OrangeTheory is a great example of this idea, it started with a new approach to fitness and health services using the group fitness model and what started out as the “Ellen Latham” fitness program used innovative technology and system to help clients measure their heart rate as they went through the fitness program.
With partners, the business rebranded to OrangeTheory and in only 6 years was able to expand to over 1,000 locations worldwide. Fitness is a crowded and competitive market which makes this growth even more incredible, but what has helped drive the expansion is a great concept, something innovative and different from what had been done in the past.
The branding and overall look, feel and presentation are what have helped carry the model forward and in an essence have been the vehicle to support new franchisees’ willingness to invest in the model. Ultimately, if you are going to franchise your business, you should have something innovative and something that will create interest and ultimately spark the investment in your brand and franchise model.
Good Numbers are the Heart of a Good Franchise
It only makes sense that when you franchise your business, you are ultimately selling an investment opportunity. If the numbers and return on investment exceed expectations for franchise investors, odds are that the model will continue to sell and grow. The Creamistry Franchise model is a good example of this which is a new brand in the ice cream and frozen dessert market segment that has in a way redefined the market niche. The model incorporates liquid nitrogen to freeze the ice cream product and at the unit, the level has produced significant revenues and profitability for early adopter franchisees.
Impressive financials have been part of the presentation for Creamistry and the response has been nothing short of miraculous with over 200 units sold in the first three years of franchise development. Fortunately, franchisees have been able to generate similar numbers in their units and continue to validate the brand and financials which in turn only drives more unit growth. What Creamistry has realized, much like other brands is that when the model works and financials exceed the norm for an industry, multi-unit and master franchise growth becomes a reality. Multi-unit franchisees are capable investors who have the capital to invest in 2 or more locations at one time. In some cases, they will invest in large numbers of units at one time exceeding 50 units over a defined time period.
For more information on how to decide whether to franchise your business and when is the right time to franchise, contact us for a no-obligation consultation to review the model.