3 signs your business has franchise brand value
In Australia and indeed the world, franchising has become big business. The McDonald’s and Starbucks effect has changed the way consumers interact with an operation, but aside from just good food and service with a smile, their success is dependent on franchise brand value.
It isn’t just financial value either. Franchising is a system that relies on replication.
Customers should be confident that they can walk into an outlet anywhere in Australia and receive the same product and service standard.
Dustin Hansen, CEO of global shipping and logistics franchise InXpress believes franchise brand value is a network-wide responsibility.
“One of the principles of brand value is that as it increases, it raises everyone in the network,” he said.
“As we know in franchising, it’s not an intra-personal relationship, it’s an inter-personal relationship, where the whole network is affected by the decision making of each individual franchise unit.”
For this reason, having a strong franchise brand value is critical to the success of the entire network. But how can you be sure that your chosen franchise has positive brand value?
Here’s three ways you can measure your prospective venture’s franchise brand value.
The old adage goes, ‘past-performance is the most reliable indicator of future performance’, and when it comes to support and structures, this couldn’t be more true.
Strong brand history doesn’t necessarily mean that a franchise has to be a hundred years old, rather that the brand has a history of success.
Ask the franchisor a series of questions and do your research regarding the profitability of past and exisiting franchisees and the lineage of the operation.
Has there been a high turnover of franchisees? What is the average rate of renewal for existing partners? Was the business a successful corporately owned operation before it started franchising?
The last question can be particularly poignant. Overseas, where regulation isn’t as strict, some struggling brands will turn to franchising as a method of regenerating interest. Remember, if a business starts in the red, it usually stays in the red.
History can also refer to legal background. Your disclosure document should outline any ongoing or past litigation proceedings. A clean history equals brand value.
2. Satisfied franchisees
If you are considering getting into a franchise, who better to speak to then the existing network?
Speak to current franchisees and ask them questions. Are they happy with the business? What support do they receive? Knowing what they know now, would they do it again?
Consulting the existing franchise network is a pivotal step in your due diligence process. Take the time to introduce yourself and take a look behind the scenes of an operating outlet before making the commitment.
A network full of satisfied franchisees is the ultimate tool in alleviating your franchise fears.
3. Commitment to innovation
It really doesn’t matter what industry you operate in; times are changing.
Technology is evolving at a rapid pace, and in the franchise game, if you don’t adapt, you collapse.
Speak with the franchisor, ask them what new technologies or innovations they’ve implemented over the past 12 months.
Your franchisor should be able to list a number of new market technologies, whether they be client-facing or back end. Technology exists to streamline small-business, and franchise brand value is dependent on the network’s willingness to adopt innovative procedures.
Ross Worth, CEO of iconic fast-casual dining franchise Hog’s Breath said the evolving retail landscape was one that must be looked at with fierce curiosity.
“This is absolutely not an industry where you can keep doing what you’ve always been doing and expect to succeed,” he said.
Be sure to commit to a brand with a forward-thinking approach to innovation. Customer demands are constantly shifting, and only an agile business will be able to consistently meet them.
Final thoughts on franchise brand value
When we think value, we generally focus on financial, but it’s really about a lot more than that.
Franchise brand value is in the way that a company treats its workers and customers, in the way it provides support, and commits to improving on every aspect of operation.
Before you commit to any franchise opportunity ask yourself what is valuable to you. Does your prospective franchise fit the bill?