Franchisers dream of having multiple stores and charging tenants to use their brand and rent their premises. But franchising for many isn’t as glamorous as all that. According to data from the WSJ, around 80 percent of franchise owners own just one unit – the one that they use to do business. And so there’s a massive need out there to expand and to grow quickly.
Experts in the franchising industry say that there are ways to make the jump from one location to multiple locations, but it takes a lot of work. Here’s what they had to say about delivering consistently high performance across multiple stores.
Get Used To Managing The Managers
No matter what type of business you’re in – whether it’s selling flowers, running restaurants or opening up cafes – you need a professional team of managers to help you run your stores. The problem is that each individual store is usually only as good as the manager running it. An incompetent or dishonest manager can wind up costing you a lot of money.
According to the WSJ, franchise owners often end up getting so busy opening up new locations that they fail to check in on their existing stores. Getting sidetracked like this can mean that a store goes off the rails and stops delivering the quality level of service that you expect. According to Richard Sharoff, a long-time franchisee, owners need to be honest with themselves about whether they can manage from a distance. Often they’re not able to, and their brand ends up suffering.
Salad bar franchise owner Jim Dooney eventually managed to scale to more than nine locations over the years. But each new location only became profitable after his shops began performing on a number of key metrics. Otherwise, they were loss makers and a drag on his business. He started giving out individual stores marks for the quality of their operation, including things like how fresh the lettuce was and how closely they were following official marketing advice. Dooney’s approach only worked because he personally collected the metrics himself and held his managers to account.
Keep Locations Homogenous
There’s a reason all McDonald’s restaurants look the same: it’s just cheaper that way. It makes planning a new store a heck of a lot more efficient, lowering the cost. Franchisers need to have the same factory-style mentality: each store should be a cookie-cutter version of other stores in the fleet.
Instead of trying to shoehorn new interiors into irregular buildings, many franchisers approach a pod manufacturer that can construct identical interiors for their internal spaces. Not only does this make things cheaper, but it also makes sourcing replacements parts and services less of a headache too. Homogeneity breeds consistency and helps to lower costs.
Help Franchisees Build Bonds
Good initial sales numbers might be heartening, but they’re not enough on their own to guarantee the success of a new location. Often new locations get a sales bounce when they first open as people go and try them out. But over time, they can end up slipping into the red as customer interest wanes. Franchises which succeed are those that play an active role in the community and build bonds with their clients.