Are your franchisees ready to expand?
High achieving single unit franchisees will be looking for the next step in business growth. Many franchise networks embrace multi-unit operations but not every great franchisee can successfully upscale their business to multiple sites.
And there’s a big jump between the delegation and organisation required to manage two or three outlets, and the skills essential to operate four, five or more territories or outlets.
So how can you spot a franchisee who is ready to become a multi-unit owner?
At the recent Multi-Unit Summit, run by the Franchise Relationships Insitute, David Hood, president of US firm iFranchise Group, shared his franchisee, franchisor and advisor experience with delegates.
Hood suggests 8 measures to review when considering suitability:
- Goals, capabilities, plans
- Strengths and weakesses
- Support structure
- Level of engagement
- Operational compliance
- Building team plan
- Quality of marketing
1. Goals, capabilities, plans
Does the franchisee have ambitious targets, has he or she shown the capabilities to work plans and achieve goals? Could the franchisee take this to the next level?
2. Strengths and weakesses
Is the franchisee aware of his or her strong points? How has the franchisee used his or her strengths to grow the business so far? What are the weaknesses now that could exacerbate as the business grows? How has and will the franchisee overcome their own weaknesses in the business?
3. Support structure
The franchisee needs to have a solid support structure within the business to ensure an expanded operation continues to function optimally, and to have the will and the capital to invest in restructuring and developing support roles.
4. Level of engagement
Franchisees who are already highly engaged with their fellow franchisees across the network, who attend conferences, seminars, workshops and training, who mentor, who have built relationships with the franchisor team - these are the franchisees who have the energy and commitment required for multi-unit franchising.
5. Operational compliance
A multi-unit franchisee doesn’t need to be a ‘yes’ man or woman to be a multi-unit owner (in fact appropriate challenges to the franchisor can help boost the overall brand’s performance) but being a faithful follower of the rules and complying to brand strategy is a must if a franchisee is to multiply their brand activity and as a result, their impact on the brand.
Strong organisational skills are a must for any franchisee operating multiple business units. While some multi-unit franchisees insist on maintaining regular frontline or hands-on activities, working on the business rather than working in it is going to be the key to success. Franchisees need to exhibit their ability to run a business, not just operate a franchise unit.
7. Building team plan
As a business of some size, a multi-unit franchise operation relies on its staff. It’s important to see that a franchisee has a team plan that works, and staff are engaged and committed to growing the business and moving up in their own career.
8. Quality of marketing
Marketing is one of the four tenets of a franchise, and quite often a skill that new franchisees don’t possess or feel comfortable with. Your go-ahead franchisee will need to show that their marketing of their business and your brand has been of the highest quality, productive and compliant, across relevant channels.