As a franchisee, you're part of a unique franchise system—but you're also running your own business.
This unique business position comes with its own set of challenges and opportunities.
While you have some autonomy to manage your franchise location, it's crucial to understand and align with your franchisor's expectations.
Based on my years of experience in the franchising industry, I've identified three key areas that franchisors consistently want their franchisees to focus on. Let's dive in.
Maintaining Brand Consistency
First and foremost, franchisors are deeply invested in their brand. They've spent years, sometimes decades, building a solid reputation, developing products or services, and creating a unique customer experience.
Remember, as a franchisee, you're not just running a business; you're a real-time ambassador for the brand. This is why maintaining brand consistency is typically at the top of a franchisor's priority list.
What does brand consistency look like in practice?
For starters, it means using the correct logos, color schemes, and marketing materials provided by your franchisor. But it goes much deeper than that. It's about delivering the same level of quality and service that customers expect from the brand, regardless of location.
For example, if you're running a fast-food franchise, it's not just about using the right packaging or uniforms. It's about ensuring that a customer can walk into any location and have virtually the same experience – from the way they're greeted to the taste and presentation of their meal. This consistency builds trust and loyalty, which benefits both you and the larger franchise system.
Finally, you need to know that the training and resources today’s franchisors provide aid you in maintaining brand consistency.
Take advantage of these tools and regularly review your operations to ensure you're meeting brand standards. Remember, when customers have a positive experience at your location, they're more likely to revisit you or visit other franchises in the system. That way, everybody wins!
Driving Local Market Growth
While franchisors are focused on the big picture of overall franchise unit growth, they rely heavily on franchisees to drive individual growth in their local markets. This is the second key area franchisors want you to focus on.
As a franchisee, you have a unique advantage: local knowledge. You have experience and can probably understand the nuances of your market, the preferences of local customers, and the competitive landscape in a way that corporate headquarters simply can't. Franchisors want you to leverage this knowledge to maximize your location's potential.
What does that mean?
For one, it means being proactive about local marketing efforts.
So, while your franchisor will provide national or regional marketing support, it's often up to you to connect with your specific community. This could involve sponsoring local events, partnering with nearby businesses, and tailoring some of your social media content to resonate with local customers.
For instance, if you're running a home services franchise in an area with a lot of new homes being built, you may want to focus your marketing efforts on new homeowners. If that’s the case, ask the marketing team at franchise headquarters if they can come up with some targeted marketing.
Another example would be if you're running a fitness franchise that’s in or near a college town, you could create special promotions targeted at students and faculty members.
Remember, your success as a franchisee directly contributes to the success of the entire franchise system. By focusing on driving growth in your local market, you're not only benefiting your own business but also strengthening the brand you're a part of.
Financial Management and Transparency
The third area franchisors want their franchisees to focus on is sound financial management and transparency. This aspect of your business is crucial not only for the success of individual franchise units but also for the health of the entire franchise system.
Naturally, franchisors expect their franchisees to keep accurate and up-to-date financial records.
This includes tracking sales, managing expenses in every area of your business, and using proper bookkeeping practices.
As a rule, franchisors require regular financial reporting, and franchisors take these reports seriously. Not only do they use this data to assess the overall health of your franchise business, they also use this data to identify system-wide trends and make strategic decisions about inventory and marketing.
But good financial management goes beyond just keeping records.
Today’s franchisors want to see that you're actively managing your finances to maximize profitability. This might involve helping you find areas where you can reduce expenses while finding ways to increase your profit margins.
For example, if you're running a retail franchise, your franchisor might expect you to closely monitor your inventory levels. Overstocking ties up capital and can lead to waste, while understocking can result in lost sales. By keeping optimal inventory levels, you're demonstrating good financial management that benefits your individual franchise business and the brand’s franchise network as a whole.
In addition, transparency is equally important. Franchisors expect open and honest communication about your financial situation.
Namely, if you're facing business challenges, it's better to be upfront about them. Many franchisors have the resources and expertise to help franchisees navigate financial difficulties, but they can only help if they're aware of the situation. So don’t be shy if you’re business is experiencing a downturn.
Wrapping Up
You need to remember that the franchise business system is designed to be a win-win.
You win because you get to be your own boss by using a specific brand and the terrific business systems it includes.
Franchisors win because they can expand their brand’s presence and increase their revenue in the process without using all their own money.
The things I mentioned above that franchisors want you to focus on go far in creating this winning scenario. For both parties.
~~
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.