Franchising Right – How Do You Make Your Franchise System Support Your Franchisees?
Announcement posted by BudgetOne 08 Aug 2017
Getting franchising right leads to ongoing success. So, it makes sense to look critically at what factors make a franchise prosperous. According to research, business planning and management are ‘two musts’. But, it goes deeper than this. Mentoring and business growth advisory services are critical aspects of that planning and management.
Franchise Mentoring and Business Growth Advisory Services
Apart from having a tried and tested franchising business model in place and systems that work, mentoring and business growth advisory services are critical to franchise success. As such, mentoring needs to be business focused, rather than just focusing on the technical aspects of products or service. Plus, mentoring must also be ongoing, to keep pace with the market. This approach makes the franchise competitive, and the franchisee able to keep-up with changes in consumer behaviours and market trends.
Business growth advisory services, on the other hand, must be available when needed. Having this structure in place means that franchisee questions get answered quickly, so they overcome challenges without unnecessary delays.
Research Data
Looking at research on why franchises fail, the primary reason is poor business planning and management. According to the Franchising Australia 2016 survey, in 2014, 1124 franchise brands existed. However, these numbers dwindled to 1089 brands in 2016 – a decrease of 3.1 percent.
So, what were the main reasons for a drop-in brand numbers?
- Brands failed to maintain stability – bad business models, inadequate training and support and poor cash management.
- Brand growth wasn’t sustainable – poor planning, unrealistic expectations, and failure to evolve.
Franchise and Franchisee Success
Undoubtedly, the success of a franchisee supports the success of the franchise. Therefore, it’s in the best interest of a franchisor to support their franchisees. To genuinely do this, broader mentoring and business growth advisory services need implementation from the get-go and then throughout the franchisee’s business journey.
Stellarossa, Xpresso and Jim’s Financial Services are ideal examples of this.
- Stellarossa – wanted to improve the value of the franchise model for new and existing franchisees, and extend and improve its café and coffee shop market share.
- Xpresso – needed to sustain growth and brand positioning of the mobile café group, as well as attracted new franchisees and support existing owner success.
- Jim’s Financial Services – sought to protect the franchise’s status in the competitive lending marketing and looked to distinguish its reputation of support-excellence.
Getting Planning and Management Right
All three franchises – Stellarossa, Xpresso and Jim’s Financial Services – used Budget One’s unique business planning and growth mentoring programme for new and existing franchises. Consequently, this programme incorporates two plans – Start Up Success and Business Success.
Ideal for new franchises starting out who need to record their venture idea, gain financial insight and to set-up a plan to succeed. This plan includes:
- Customised business plan
- 12-month road map
- Cash flow forecasts
- Regular progress checks
- Action step identification
Implemented after franchise operation of more than 12 months, this plan focuses on:
- Business performance
- Staffing
- Expense control
- Accelerating growth
This two-step model enables Franchisors to provide the right type of support and advice needed according to the franchisee's period with the business.
As such, our programme has been designed to help franchisors create an active and engaged franchise support system that will drive growth in the brand. But this does not happen overnight. It is developed and nurtured only by providing ongoing, effective franchisee support.
By providing franchisees with best-practice business planning tools, helping them understand and live by the numbers as well as determine together, the right actions to move forward, franchisees are being coached to become "better managers".
Franchisors should look at implementing a management programme that is an extension to their initial product/technical training offer. Business planning and mentoring programmes will deliver a higher rate of visibility into your franchisee community as well as give your franchisees a strong sense of support and dependability from the corporate team.
Franchisors that are not getting the results they believe are possible in their system, need to re-look at their model to determine how they are going to provide effective franchisee support.
See our Franchising Success Stories
Are you looking to create a secret weapon against your competing franchises?
Call Taso today on 0429 142 413 and learn more on how we can help your franchise enhance its appeal and balance attracting new franchisees while supporting long-standing ones in their journey to business growth success.
If you're actively looking to franchise or want to purchase a franchise, don't miss the Franchising Expo in Melb this month. Come and visit us at stand D32.
Author Taso Tounis
Taso Tounis is a business planning, cash flow management and budgeting consultant. He is passionate about equipping soon-to-be business owners with insightful knowledge on the outlook of a prospective business so they can decide if its the right fit and has great success potential. Learn more about Taso.
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Read more on our business planning and business growth advisory services.