Franchise systems – some people love them, some people hate them. Regardless of your position in this ongoing debate, understanding what makes franchise systems successful and applying these ideas to your small business can help your business scale and grow.
So, what traits do all of the best franchise systems have in common? I’m glad you asked!
Through my years of experience as an attorney working with many different franchise systems, I’ve noticed a few key things that all great franchise systems have in common. While this list is not at all exclusive of what makes any given franchise system great, what I believe to be the most important characteristics of the best franchise systems are as follows:
- The best franchise systems have systems that are easy to understand and follow in place.
- The best franchise systems understand that a simple business model is always better.
- The best franchise systems are focused.
- The best franchise systems establish high quality brands.
- The best franchise systems recognize the importance of location.
Now, just because a franchise system has these characteristics does not mean that the franchise system will automatically be successful. The same can be said for small businesses, but today I want to talk about how to implement these ideas to help you on your way to scaling and growing your business. So, let’s dive in!
The best franchise systems have systems that are easy to understand and follow in place.
The bottom line is that systems are important. I firmly believe that systems are one of the most important things you can do to help your business scale and grow.
So, what is a system? Basically, systems are documented processes and procedures businesses use to ensure that tasks are completed the same way each time, regardless of which employee does the work. Good systems ensure quality control, keep things from “falling through the cracks,” and save time and money. Systems also help employees know the expected outcome each and every time they complete a task. Perhaps most importantly, the best systems help make sure that supervisors, managers, or business owners can focus on the big picture, rather than micromanaging every employee.
The best franchise systems know and understand how important systems are to a business. These franchises usually provide detailed operations manuals that are up to date. After all, it does you no good to have an operations manual on how to sell your products if you no longer carry any of the products that are featured in the manual! Operations manuals should also be easy to follow so that new franchisees can easily reference the manual to get tasks done quickly. The best franchises also implement systems that have been tested, improved, and retested. This helps ensure that when a franchisee decides to open a new location, they can be sure that the systems will work.
As a small business owner, I highly encourage you to work on creating your own systems. We all use the basic idea behind systems every day, even if we don’t recognize it. In fact, if you are a business owner, I guarantee you have steps that you follow in order to complete tasks or projects for your business. You can turn these steps and processes into systems by documenting them. Documentation doesn’t have to be fancy or expensive, but it should be detailed! This documentation can then be used to help train other employees on how to complete the tasks.
It is important to keep in mind that building systems is an ongoing process. As a small business owner, it is your responsibility to continually check to make sure that your system works and is being implemented correctly!
The best franchise systems understand that a simple business model is always better.
Oftentimes, entrepreneurs really struggle with making things simple. After all, you probably chose to be an entrepreneur, at least in part, because you have a lot of really great ideas! That is why it is so hard for many small business owners to understand the importance of a simple business model.
The best franchise systems already demonstrate a clear understanding of the importance of a simple structure. These franchise systems really provide a clear and concise picture of their services to their consumers. Having a simple business model allows the best franchise systems to focus on great costumer service rather than new ideas.
So, as a small business owner, it is important to simplify your business model. It is too easy to slip into the idea that your business has to do everything! If you try to do everything, you will most likely lose the quality and customer service that makes your business unique among competitors.
The best franchise systems are focused.
The idea of keeping a business focused is very similar to the idea of keeping a business model simple. It is actually really difficult to talk about one idea without mentioning the other. A simple business model helps keep your business focused, while staying focused helps keep your business model simple.
The best franchise systems realize this connection. The best franchise systems stay focused on what they are able to do well, their target market, and their goals for sustainable business growth.
Oftentimes, I see small business owners get distracted. They start with one great product or service and think the key to success is to keep adding new products and services. However, doing this too quickly can lead to a decline in business and make running the business more expensive.
Staying focused can be hard! As entrepreneurs, we always want to move on to the newest challenge or the next big idea! However, if you are able to focus your drive and ambition on strengthening what your business already does, both your customers and your business will thank you for it!
The best franchise systems establish high quality brands.
Whenever I say the words “franchise” and “brand,” an image probably pops into your head. It may be of your favorite fast food restaurant, of an awesome gym you just joined, or your favorite supermarket.
This is because franchise systems have figured out how important branding is! The best franchise systems want the consumer to instantly associate their easily recognizable brand with the high quality products and services that the consumer needs.
As a small business owner, it is important to establish a high quality brand. You want your consumers to associate your business with things like great customer service, awesome tasting food, your company culture, or an affordable solution to a common problem. So, as a business owner, make sure that your brand is a good representation of what consumers can expect when they purchase your product or service.
The best franchise systems recognize the importance of location.
Location… Location… Location… We’ve all heard that a million times because, you guessed it, location is important!
The best franchise systems know and understand how important location is. These systems have made selecting an ideal location more like a science than an art by looking at things like accessibility to major roadways, population density, visibility, and competition.
In the same way, small business owners need to focus on location, but this isn’t always as easy as it sounds. Maybe you run your business out of your home because you can’t afford to rent a large space in the nearest shopping center, or you purchased a building further away from the downtown area because you needed more parking spaces for your employees and your customers. Truthfully, there are always tradeoffs when it comes to location. So, honestly evaluate where your business is located and then determine whether moving elsewhere is feasible and could directly benefit your business.