Here are seven tips from Henk Botha, franchise development manager: restaurants and quick service restaurants of Absa, on how to overcome these challenges and turn your business into a thriving franchise:
• Tip 1: When becoming a franchisor you will need to be stringent with your franchising selection. Your brand is based on your business’ performance and maintaining your good brand reputation is essential as your business grows. You will, therefore, need to look for franchisees who have the same values and work ethic. This will reduce business closures; demonstrating to investors that you have a stable and good business;
• Tip 2: Research, and more research, is very important when entering a new challenge in business or life. Adopt a complete and proper end-to-end data management system that will help support your business. It’s important that you find accurate and proper data that will proactively identify problematic and under-performing outlets that could jeopardise your brand’s future;
• Tip 3: Diversifying into different services within your business will assist in creating new streams of revenue. For example, a fuelling station can diversify by including a store shop and car wash to create alternative revenue. Diversification also helps to spread risk during tough economic times;
• Tip 4: Investigate the different opportunities in the value chain that will give you the best value and quality for your business. This could reduce costs and improve margins for the franchisees, in addition to also becoming a further income stream for the franchisor;
• Tip 5: Open and operate your own corporate stores. Running a corporate store enables you to experience the true challenges that your franchisees experience on a daily basis, thus ensuring that the operating model stays relevant and effective;
• Tip 6: A multiple store ownership model can assist with overcoming the obstacle of finding the right franchisee for your business. This can be one of the biggest challenges when expanding a franchise. In a multiple store model an existing franchisee is already known and culture fit and experience do not present obstacles. The model also brings an operational saving to the franchisor as you can have a large franchise network while dealing with fewer franchisees; and
• Tip 7: Most importantly, always prioritise your competitor analysis and stay informed about the industry that you operate in.
