The Four Steps to Successful Franchising
Winning franchising companies have done their homework. They fully grasp the
dynamics of franchising. They have a well thought out, detailed plan to which they are
fully committed, and then execute brilliantly. They are following what I call, “The Four
Steps to Success in Franchising”.
Step 1- Are you franchising ready?
If you are thinking about franchising, have you asked yourself, your board, and your lead
team some fundamental questions: Why do we want to franchise? Is our concept
franchisable? Does it fit well with our overall growth strategy, our systems and business
processes, and our culture? How committed are we?
If you are already franchising, and are not happy with the results you are getting, have
you stepped back and done a thorough, unbiased situation audit?
For example, have you looked inward? Franchising programs will often stall or burnout
because your own corporate staff is not really on board with the program.
You should also conduct a complete review of your business processes and franchising
tools to learn how they may be negatively impacting your success. In Step 3, we will look
at some things you need to re-examine.
Step 2- How big? How fast?
Of course, the answers start with your concept’s target customer. Do you really know
who they are beyond simple demographics? What are their lifestyles, and how does your
concept fit? What are their usage patterns?
Do you know who your competitors really are? Have you done an in-depth competitive
analysis to understand their growth strategy, and their strengths and weaknesses?
Armed with this knowledge, you can start formulating your franchise and company
growth strategy. The days of being successful selling a single unit franchise here and
there to anybody that has the money are gone.
Step 3- Do you have the right stuff?
A large part of your success in franchising will be determined by the processes and tools
you have in place sell franchises and support those you have.
On the development side, this will include not only meeting the legal requirements, but
also using them to your advantage. For example, is your UFOC just meeting the
requirements, or is actually a selling tool?
Do you know who your best franchise prospects are and where to reach them? Do you
know what characteristics will make them successful in your system?
How do you market your franchise? When a prospect shows interest, what information
do you provide and how are your presentations?
Is your sales process solid from the first contact through every subsequent contact to
On the franchise support side, do you have clearly defined processes and tools to
address encroachment issues, site approval, design and construction, developer and
manager training and certification? Do you have a proven model for opening new
locations successfully? Is your on-going support model working well for your
Step 4 – What’s the buzz?
As in personal relationships, frequent, effective and sincere communications are
essential. Do your staff and your franchises have an opportunity to participate in the
strategic planning process? Are they given ample time to input improvements and other
changes to the system? Are their views given serious consideration?
Are you measuring your effectiveness in this area on a regular basis and using it to
make further refinements and improvements to your system?
Have you gone beyond comment cards to quantitatively measure guest satisfaction?
Knowing that happy employees usually result in happy guests, are you measuring their
satisfaction as well?
Are you measuring franchisee satisfaction knowing that this is a critical factor to your
ability to keep selling franchises?
Questions! Questions! How about some answers!
Yes, there are a lot of questions. While a few answers may be similar for some
franchising systems, each concept has its own unique products, services, customers,
history, culture, resources, and goals. Cookie cutter programs or remedies are not likely
to be successful.
Do your homework. Plan and execute meticulously. Follow “The Four Steps to Success
in Franchising” touched on here and your concept should be among the winners!
Frank Steed is President of The Steed Consultancy, giving franchisors proven systems
and solutions to achieve their sustained growth goals. Steed can be reached at