Are you a Filet-O-Fish, type of person?
There are so many valid reasons why franchised business models are successful. But, as with any business, it’s the people within the organisation that drive it, brainstorm ideas, implement and those that weigh up the risk with the downside initially, that normally succeed. Let’s not forget the initial investment in time and money.
However, with a franchise, the pain, the risk and the inevitable learning curves have already been through the wringer and back out the other side; in our case in over 22 years worth of learning and investment.
Apply that knowledge and skill, through a thorough training programme, coupled with the right person following a PROVEN business model and the chances are that the risk has been eroded and if applied properly, a franchisee can enjoy an excellent return on their initial investment.
The franchise model takes on many different guises. To make the financials work, you need a customer base. To gain a customer base, you need a brand, a marketing plan and materials. To implement the marketing plan, you need working capital. You need IT support, pre-negotiated supplier discounts and a supportive franchisor, that understands your business and puts in place the support mechanisms to assist you in the journey.
It’s also about teamwork and building a brand, through a recognised system that allows flexibility, as well as ensuring that there are strong guidelines in place. This is where regional meetings with other franchisees is so useful and where the Operations Manual plays a vital part in steering you through the years ahead.
The regional meetings play an important part in team building, sharing experiences and importantly, sharing ideas. Now we may have the T-shirt, but we don’t have the right to exclusive ideas!
Did you know that the famous McDonald’s Filet-O-Fish, was first thought of by a franchisee in a regional meeting? He suggested, rather than putting a burger in a bun, putting some fish in instead. The franchisor thought this was a terrific idea and went off to start formulating the recipe, the marketing, the price points, the packaging etc. Having completed that, the Filet-O-Fish, was born!
Above is a classic example of a franchisor needing a franchisee and a franchisee needing a franchisor. We are all in it together. We all benefit. We all participate and importantly, it adds value to the brand.
Why does a franchisee benefit from adding value to the brand? Well, it’s simple; their business is worth more. No franchisor expects a franchisee to stay with the business forever and a day. In fact, that is a bit of a turn-off for a franchisor. Franchisor’s are looking for individuals that want to grow a business, sometimes from a virgin territory, to then benefit from a sale sometime in the future. No franchisor wants a franchisee looking to “buy a job”, because the incentive to go above and beyond a decent salary is not necessarily there. Instead, that all-important capital gain is the carrot that we should all be aiming to achieve.
That makes our selection process, of granting a franchise territory to a new franchisee easier, rather than harder. The drive and enthusiasm to grow a business will be very apparent and that is what we are looking for.
The Franchise Agreement is five years in length and is automatically renewable on its fifth anniversary. However, we always say to franchisees, that if the business looks the same in five years time, as it does today, then we have failed you as a franchisor.
Businesses need to evolve, change with the times, they need constant investment and to continue to set high standards. They need to live and breathe, just as we do. If they don’t change, they die. Unfortunately, a great brand Wimpy did exactly that. They were taken over by the competition, because they did not change quickly enough to survive.
We won’t fail our franchisees and we know that they won’t fail us.