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4 Tips to Help Franchisors Grow Their Business

Are you a business owner who has recently entered the franchise space? Or, are you a business owner with a goal of franchising your business in the future? If so, this post is for you!

I talk a lot on this blog and on the Franchise Euphoria podcast about how to scale and grow your business. Some of these ideas apply whether you are a small business owner, a new franchisee, or a franchisor, but today’s post is designed specifically for franchisors (or potential franchisors) who want to know how they can grow their system.

For franchisors, growing your system can pose unique challenges. For example, many of the new franchisors I talk with have generally been very successful in their role as small business owners. However, operating a franchise system is a completely different ball game. When you become a franchisor, you are in charge of the whole system, which includes all of the individual franchises that operate within your system. This means that instead of running one location, you are supervising franchisees as they run and operate multiple locations that can span across cities, states, regions, or even countries. You’re also responsible for defining territories for future franchise locations and identifying, selecting, and training new franchisees.

Making this transition can sometimes be difficult for new franchisors. It becomes even more complicated when new franchisors begin to think about how they can grow their business. So, here are my four tips on how to grow your franchise system:

  1. Understand the Importance of Geography;
  2. Develop a Plan to Train Franchisees;
  3. Know the Difference between Marketing a Business and Marketing a Franchise System;
  4. Fill a Need in the Market.

So, let’s take a closer look at each of these tips!

Understand the Importance of Geography

We all know the importance of location, but location becomes even more important when you are a franchisor. We aren’t just talking about one location. Now, in most cases, you play a role in figuring out the location of each and every franchise within your system. Therefore, you need to be focusing not only on location, but also on geography.

One problem that new franchisors face is deciding where to open new locations. For example, say a small business owner in Indiana converts his business to a franchise. Now, someone approaches the new franchisor and wants to open a location in Arizona. The new franchisor may think that this sounds like an awesome opportunity to grow the franchise system, but I tend to disagree.

I believe that the best practice is to dominate the 100 mile radius around your original location first. This way you can be close by to help franchisees if they encounter problems, which will inevitably save you time and money. Once you have successful franchise locations “in your own backyard,” you can focus on expanding outward.

But, beyond this idea, franchisors really need to have a clear understanding of the geographic parameters for new locations and territories. What geographic features have helped to make your location successful? Population density? Access to major highways? Or, something else altogether?

Once you have your parameters in mind, sit down and map out territories that will help your franchise system grow in a smart and well-organized manner.

Develop a Plan to Train Franchisees

Have you ever worked for an employer that was disorganized, offered little to no training, and where it seemed like no one knew what was going on? If so, you know how frustrating that situation can be.

Don’t let your franchise system operate in that manner! As a new franchisor, you should really spend a lot of time planning exactly how your training or onboarding program will operate. While an operation manual can be a training tool and contain answers to franchisees’ questions, it usually isn’t enough to help franchisees understand all of the different aspects of the business perfectly. Implementing proper training programs helps fill this gap and get your new franchisees off on the right foot.

Remember, as a business owner you’ve had the opportunity to learn from your mistakes and grow. So, what can you do that will help new franchisees avoid making these costly mistakes, while also empowering them with the knowledge that you have learned from your years of experience? Keep in mind that while new franchisees probably have prior business experience of their own, they may not know specifically how you do things within your business.

If developing a training plan isn’t one of your strengths, there are third parties that offer a range of products and services (at various price points) that can help. Also, don’t be afraid to talk to your current employees. They usually hold useful insights on the most efficient way to get things done and may remember things that you forgot.

Know the Difference between Marketing a Business and Marketing a Franchise System

If you’ve moved into the franchise space, you’ve probably got a good grasp of how to market your business. But, how are you marketing your franchise system?

In reality, marketing your business is different than marketing your franchise system. With your business, your marketing strategy is focused on getting people from your target market to purchase your products or services. In marketing your franchise system, you are targeting potential franchisees who will invest in your system and open new locations.

With that in mind, develop a strategy to help you identify your ideal franchisee. What qualifications do they need? What educational background or relevant business experience should they have? What about financial resources? What else do they have to bring to the table to make you feel confident that they can successfully operate a franchise location?

Don’t feel like you need to say yes to everyone who expresses an interest in your franchise system. It is usually better to wait and find great franchisees, especially in the beginning when you are just growing your franchise system. Your first franchisees will help establish the foundation of your system, so choose wisely!

Fill a Need in the Market

Finally, one of the keys to growing a successful franchise system is to fill a need in the market. As a franchisor, you need to have a keen understanding of this idea and use it to benefit your franchise system.

The first step is understanding your market competition. If you’ve been in your field or industry for a long time, you probably already have some idea of what is out there. But, markets are constantly changing with advances in technology, changes in law, or new trends. Be sure you have a clear understanding of the developments that have occurred in the past, that are occurring right now, and that may occur in the near future.

After you’ve analyzed your competition, figure out how you can differentiate your franchise system in a way that your consumers will appreciate. As an example, I interviewed Matt Frey of Bub’s Burgers & Ice Cream, home of the Big Ugly Burger™ on the Franchise Euphoria podcast. During our interview, Matt talked about how focusing on five key elements has helped make his business stand out from the crowd.

So, what is it that makes your franchise unique? How do these attributes help you fill a void in the market that your competition isn’t reaching? Use these features to help you grow your system.

Ultimately, growing your franchise system will take a lot of hard-work, time, and planning. However, it is much better to invest in laying a strong foundation for growth early on in the process than to deal with big problems down the road. As always, if you found this blog post helpful, I invite you to check out our blog and podcast, or visit our Contact Us page to get in touch and figure out how our office can help you achieve you franchise goals.