7 features of a successful franchise business

The dream of building a fast-growing and profitable franchise is definitely ambitious – but definitely possible. Our director Carl Reader reveals the seven key features of a successful franchise business.

Carl Reader QFP, business expert and director of d&t

A quick online search for “how to build a successful business” conjures a wealth of thoughts and opinions of all shapes, sizes and styles. At d&t, as the UK’s market leading franchise accountants,  we’ve worked with thousands in the franchise industry, and there’s no one secret key to building a successful franchise business. But there are some common pitfalls. Here’s my advice for newcomers (first published in WhatFranchise magazine)

When starting a franchise, you are starting something more than your conventional business.You’ve already created a successful enterprise, any wrinkles have been ironed out, robust systems are already in place, and presumably you are confident you have a winning formula for what you do. So how do you take this to the next level and become a successful franchise business?

First things first – it’s all about the peopleEvery business relies on its people, and in a franchise this is no different. Your franchisees are the ones who maintain your brand’s integrity and ethos on your behalf. And that, in many ways, is key to your franchise business’s success.

Every franchisor faces a tricky situation however, in that there is always going to be a level of dilution between them and the troops on the ground. In a simple, corporately owned business, the head office is directly responsible for the recruitment, training and retention of staff. But this isn’t appropriate for a franchise network, as the franchised units are in business in their own right, and as such they hold the responsibility for managing their own team.

Whilst franchisors will naturally be hesitant to perform the hiring, paying and firing of employees for all their franchisees, they can certainly set the recommended processes and procedures to make sure that the people coming on board are people who will add to the business.

Get the culture rightMore importantly, it is essential for the franchisor to set a very firm culture across the organisation. Some of you will know that a franchise consists of four things. Three items are fairly tangible (the legal agreement, the operations manual and the licence to use the brand and trademarks), together with the largely unspoken matter of “the way we do things”.

So how can a franchisor help ensure that staff are trained, motivated and managed in a way to maintain the brand ethos?

– Prioritise making sure that your franchisees are trained, motivated and managed

– Your franchisees should be both brand and system ambassadors. It might seem obvious, but if you allow your franchisees to do their own thing, you’d be very lucky to have a network of franchisees and staff that are pulling in the same direction.

– It’s vital to include staff recruitment and retention as part of your initial and ongoing training, and to look at how you can manage and support franchisees in this area, to make sure the right people are being hired. One way that many corporate franchisors keep an eye on staff morale and motivation is to implement staff engagement surveys. These will highlight the good, the bad, and the ugly in your network. It will also allow you to identify any worrying trends before they jeopardise your brand.

– Head office culture

You can have the very best training and systems but it’s unlikely to actually be implemented unless you have a strong culture amongst your head office team. You need to work on thoroughly understanding your core vision and values, then find a way to get your senior head office team to fully buy into them and get them truly established in the business.

Once your head office is aligned with these, you are in a good position to set the culture across the network. There is no right way to do this; some organisations set these autocratically, while others involve team members at all levels to help in this process.

Be aware that there is no right culture for every organisation, and the tone will always be set from the very top. Make sure you’re fully on board with it.

– Make sure you spread the love across the network

It’s all well and good having a great culture at head office, but you need to make sure that the culture is shared across the network and all team members.

– Focus on increasing touch points with your franchisees, and think about how your regional managers can move from checklist tickers to a true support for your franchisees. The d&t Franchise Dashboard is a powerful piece of software we created to help you monitor support and stats across your network – find out more.

– Initiatives such as franchise councils are a great way of involving your franchisees with the strategy, governance and direction of your brand. They also help franchisees feel a sense of inclusion.Make great use of events, to your advantageAnother way of increasing franchisee engagement is to run a series of regional events, together with a landmark annual conference. Whilst these are focused on the franchisees, they will also help ensure that your franchisees are engaged with “the way we do things”. This in turn will help them implement your processes and best practice when it comes to staff matters.You should make sure that your regional events focus on topical areas – including staff recruitment, motivation and retention.

Finally, at your annual conference, look at how you could present awards for staff members of your franchisees’ businesses, as well as for your franchisees.

Be aware of change, but make sure you’re still true to your valuesEvery business must reflect, change and develop, and your franchise is no exception. With this in mind, make sure staff training is a priority. Where possible, centralise training. Whilst it is impossible for head office to train every individual new employee in a large network, you can always find ways to provide centralised training.

Consider whether there is the option to run regional workshops for the employees in a certain area. Then they can meet representatives from the head office team and hear things “from the horse’s mouth”. Also, look at whether you can provide any e-learning for the employees of your franchisees.

If done properly, your franchisees, their teams, and your brand should all benefit from these initiatives. Effective, consistent training that is in line with core company values, is vital to a successful franchise.

Finally, a word of warning!

Don’t be the “Undercover Boss”. Usually, this TV show is a CEO of an organisation pretending to be a new worker. More often than not they find things that they would have never have expected to see.

If you are in a position where you could go into your franchisees’ branches unannounced and not be noticed, there is a real problem with the connection between head office and the individual units. This can only lead to dilution of culture and standards. Don’t be the unintentional undercover boss!

For more information about franchising, talk to usAt d&t, we are proud to be the UK’s market leading franchise accountants. We support thousands of franchisees and their businesses across a wide range of sectors. Contact us to find out how we can help you gain complete control with fixed monthly fees and ongoing, friendly support and advice.