Be fair, partner wisely and keep investing – the top 3 tips for franchise success
By Centre Contributor
Renowned franchising expert Michael Sherlock, Adjunct Professor at Griffith University’s Asia-Pacific Centre for Franchising Excellence, has provided his top three tips for achieving success in franchising:
- Be fair
Do you see expansion via franchising as a licence to print money? It can be but only if you allow your franchisees their fair share of the spoils. “If people come into your system and invest their money and work hard, there’s got to be the potential for them to generate a healthy return,” Michael said.
- Partner wisely
What’s the one-ingredient recipe for a successful franchise outlet? A good operator, according to Michael. You’ll minimise dramas down the track if you’re discerning about who you allow into your network, rather than handing out franchises like lollies to anyone with the necessary cash.
- Keep investing
Be willing to invest in research and development, effective marketing and constantly fine-tuning systems to boost the efficiency and profitability of your franchisees. “You need to offer an equitable transaction whereby people work hard and follow your systems and you support them to the hilt to do so,” he said.
Michael’s tips are the result of his extensive franchising experience, including his former role as Managing Director of Brumby’s Bakeries, and were highlighted in a recent article for the Steadfast insurance broker network.
Michael also used the article to urge a systematic approach to business growth via the franchise model. He said business owners should not start thinking about franchising until they have at least two profitable outlets that have been running for at least five years.
“Many people try to go into franchising right away but you’ve really got to prove the system and have a good track record,” he said. “That means having a multi-unit, duplicable system that’s been successful over an extended period.”
After comprehensively documenting your business systems, picking quality franchisees to replicate them is crucial. A keen, high-performing existing employee is the best option, Michael said.
“I’ve seen lots of franchisors who think, ‘This is cookie cutter – boom time, let’s go!’ and they end up not surviving,” he said. As with any enterprise, Michael said trying to grow a franchise network at a fast pace can lead to problems, such as hastily approved franchisees offering shoddy service and damaging your brand or setting up shop in locations where there is no awareness of or demand for your product or service.