5 things a franchise must be doing in 2015
I believe there are five things a brand will need to do to maintain success in franchising today, and in the future, writes John O'Brien.
1. Drive top line sales
The growth of franchising is making it more competitive so to be in the game a brand needs to be ensuring steady development. Figures reflecting same store double digit growth year-on-year needs to be the standard benchmark companies are aiming for. The economy is well into recovery now and franchises achieving this level will be reflective of the status of the industry prior to 2008.
2. Drive bottom line profit
Sales are a necessity but they need to be delivering franchise partners real financial benefit through solid profit results thus ensuring long-lasting satisfaction in the business. I believe franchisors need to be examining EBITA closely and demonstrating an average performance level of around 15 percent. Maintaining a focus on this goal will provide a solid platform for franchise development teams to leverage in the sales process.
3. Take responsibility for social media
Social media has increased the level of direct communication brands can have with customers and while there is no question brands need to be utilising the medium, who is managing it and has ultimate responsibility of the channel needs careful consideration. Franchise partners need to be aware of it and contribute but they have enough to focus on so I believe franchisors need to handle the overall strategy and execution with franchisees contributing from a local perspective to add to the authenticity of messages.
4. Be transparent
With the changes in the Franchising Code set to take effect in 2015, the sector is looking to become more transparent and while that is a great outcome franchises should be doing this anyway. Franchisors need to be more accountable to their franchise networks and focus on stripping back the layers and being as transparent as possible. If they do this compliance will naturally follow and it won’t be an effort, rather a part of the culture of the franchise.
5. Monitor franchisee satisfaction
Franchises need to raise the accountability bar higher and a primary way to do this is ensure you know what the network thinks so continuous improvement can be made. The fact is, the higher the level of franchisee satisfaction, the better the business performance. Franchises should be conducting anonymous third party research at least twice a year in order to ensure accountability is truly present in the business.