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Top traits of a successful franchise

Sarah Stowe

What does it take to operate a successful franchise network?

Let’s jump straight away to the understanding that success equates to profit – but much more as well.

A good franchise system delivers  franchisees the opportunity to grow their business, reap a good return on their investment, operate in an inclusive and positive culture, and proves to be a future-focused network.

A strong and effective business relationship between franchisee and franchisor is critical to the success of both businesses and the franchise system overall, says Victorian Small Business Commissioner Geoff Browne.

“Good business relationships are also important in any other dealings you have with other businesses. Building and maintaining good business relationships can keep costs down and increase reputation and profitability.”

The six Cs of success

Consistency

Brand consistency is paramount, but the capacity for a network to stay consistent in its values and ethics is also important, says Browne.

“In a franchise system, consistency in values, ethics and behaviours are critical, and help define the system. For full alignment, these behaviours need to extend beyond the franchise system to other business relationships.”

Commitment

Long term business relationships are dependent on trust and in turn that comes from commitment.

When you buy into a franchise, you will be signing up to a three, five, 10 year term and that’s a big commitment. You want to find a franchise that reflects long term strategies and goals, and doesn’t allow short-term goals to take precedent.

Culture

Each franchise system has its own culture and you want  this to be a positive, enhancing environment. Speaking to franchisees – past and present – can help you understand what the underlying values are of the business. It’s important to choose a culture that aligns with your own beliefs and interests.

Communication

Transparency is fundamental in a business partnership – and that’s what franchising is all about. And transparency means good communications. Find a franchise where two-way conversations are common, where the franchisor uses multi-channels to deliver information, where franchisee feedback is valued.

Many franchise systems have intranet, a franchise advisory council, regular regional meetings – all these add to great communications.

And for starters, good communications between the franchisor and the franchise buyer will reduce the likelihood of unwanted surprises in the business operation. Franchisees and franchisors each have roles and responsibilities, so make sure you are clear about these.

Collaboration

McDonald’s famously works on the concept of a three-legged stool: franchisor, franchisee and supplier are equally important in creating a successful business.

Whether you are working as a sole trader or head up a team, as a franchisee you will always be collaborating – with the marketing team, with your business development manager, with customer service and support, with other franchisees in the network.

Find a franchise that has a strong support network and values your contribution as a franchisee.

Conduct

Good faith is a recent addition to the Franchising Code of Conduct but it epitomises what all good business operations should always have been doing – acting in good faith at all times. That’s equally applicable to the franchisee as the franchisor.

A low level of disputes in a franchise might indicate that franchisees are generally happy with how their franchisor is operating.

Ensure that the business environment you will be joining allows you to be professional and encourages respect.