3 tips to boost brand value
Increasing brand value can be a difficult and time-consuming process, but it doesn’t have to be expensive.
That’s what InXpress Americas CEO, Dustin Hansen told delegates at the National Franchising Conference in Melbourne, as he urged franchisors to leverage the intellectual talents of their franchisees to bolster brand value.
“Brand value as we see it, is what could an individual franchise unit be resold for, what is the multiple they could get on their bottom line EBITDA?” Hansen said.
“One of the principles of brand value is that as it increases, it raises everyone in the network. 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.”
Hansen knows first-hand the importance of driving franchise success from the ground up.
The experienced CEO started his journey as the first franchise partner of the InXpress brand, which he grew to be the most successful in the network, before making the jump to executive.
Hansen shared his tips on boosting franchisee profitability by improving the franchise network’s overall brand value.
Teach franchising fundamentals
Hansen said the first step in bolstering brand value is to make sure your franchise partners understand the model and system that they operate in, before demonstrating the benefits of full-network compliance.
“First and foremost, we wanted to teach our franchisees about this concept of franchising, we wanted to build a connection and trust with our franchise partners, more so than we had done previously,” Hansen told delegates.
“Your franchise partners are really good at understanding what they do on a day to day basis; they might be really, really good at shipping and logistics, but they just don’t know that much about franchising. That influences their success, and the equity value that they have in their franchise.”
By educating franchisees on the concept of franchising, franchisors can ensure that partners understand certain aspects of the model and why the business operates the way it does, evoking network transparency and alleviating future disputes.
Continuing on from that, Hansen encouraged franchisors to build a personal connection and level of trust with franchise partners, furthering transparency and opening lines of communication.
When a franchise partner signs on to operate a location within a wider network, it’s important that franchisee sees the benefit of committing to business practices.
Hansen suggests sharing positive resale statistics with partners and encouraging franchisees to provide a solid and consistent level of customer experience network-wide can be pivotal.
“Show and demonstrate that putting all in to this idea of brand value can really provide the ‘what’s in it for me’ for the franchise partner. This brand promise and brand experience and bringing those together, not just from a customer point of view but from a franchise partner point of view,” Hansen said.
Once franchisees see the equity value increase as a result of commitment to standards, consistency and customer experience, it’s time to leverage the intellectual talent of the network.
Build a network
While Hansen suggests that messages trickled down from head office to franchisee are important, the impact produced by peer-to-peer communication is far stronger.
“We recognised that the accountability of a peer, the communication from a peer is so much more effective than coming from a head office,” Hansen said.
In his own business, Hansen called on the franchise network to work collaboratively to improve network profitability, leveraging the human resources that the brand had worked so hard to develop.
“We wanted to tap into that intellectual capital in our franchisees that we never utilised before. We went to our franchisees and we said; franchisee profitability, whole network compliance, that collaboration and engagement between partners, these are the drivers that will increase brand value. If you want your franchise unit to be worth more, these are the things that he entire network needs to work together on to increase, so we want your help.”
Hansen utilised the talents of InXpress’ high performing franchisees, establishing volunteer roles that provided on-going support, franchise recruitment and education through peer-to-peer relationships.
The results were overwhelming, with the franchise seeing a rise in site openings, year-on-year growth, and franchisee profitability.
“I had intellectual talent that was the very best in my network helping drive brand value because they knew what was in it for them. They were increasing the equity value of their franchise business, by helping franchisees become more profitable and bring in the right partners and help those partners be educated.”
The impact of brand value
Increasing the profitability of franchise partners, creating consistent standards of customer experience and improving network compliance are all drivers of brand value.
By demonstrating the importance of increasing brand value, franchisors can leverage the individual talents of their network, while franchisees experience greater returns on franchise site resales and equity.