Gaining traction as you work to franchise your concept can take a great deal of effort and strategic thinking. After more than a decade of investing in a variety of industries and branded businesses, I’ve learned what exactly businesses need to do before they start franchising and throughout the process to maximize success. These steps are tried and true, and have guided the franchisors I’ve worked with to the opening of 750 successful new franchise locations.
Get the Culture and Branding Right
One simple concept that applies across all franchise industries and restaurant concepts: If the culture and branding isn’t strong, it could prevent your brand from growing. Franchising is a great fit when a brand has the core aspects in place: strong unit economics, compelling branding, and the team to support franchisees. If you like these aspects, it’s too early to franchise.
Potential franchisees look closely at the culture of the brand whether they realize it or not. Inherently, franchises want to join a brand that matches their personality. They need to know if your brand is fun and casual, professional and fast-paced, or passionate and customer-service oriented. If your would-be franchisee is unable to get a feel for your concept — or sees that your employees are disengaged and unenthused — they’ll likely look elsewhere for a brand that they know without a doubt will strongly resonate with them.
Know Your Ideal Franchisee
Once you have established your brand, enthusiastic and interested candidates may come from anywhere (though generally they are existing customers in the early days). It’s important to be discerning at this point in the process, and to make sure the person you’re engaging with is the right fit for your restaurant.
Are they passionate about your brand? Do they match the persona of your ideal franchisee? Are they all-in, or are they wavering as you talk about closing the deal? These are all things to consider as you work toward closing deals with potential franchisees. Two of the key aspects of a strong franchisee are a desire to follow the process set by the franchisor and a sale/hospitality-oriented personality.
Take the Time to Understand Your Market
Often, franchisors are so eager to take their brand from regional powerhouse to national favorite that they do not put enough time and energy into discovering what growth markets are best for them. For example, an organic, health food restaurant might do better in urban areas than an up-and-coming sandwich chain. Understanding your market and targeting the right geographical regions will only increase the success of the franchisor and franchisees, so it’s worth the time investment to do the legwork and research up front.
Early on it is also helpful to be able to get to your franchisees quickly (via short flight or drive) so that you can support them well. Expanding in nearby areas allows you to support your franchisees better while also benefiting from some of the brand recognition you may have in a region. Concentric growth simplifies supply chain complexities as well since you don’t have to add new distribution centers or vendors early on.
Don’t Just Rely on Word of Mouth
Putting some capital into marketing efforts can make all the difference for brands trying to expand into new markets. In my experience, spending money on multiple marketing efforts is key to driving leads whether it is through digital advertising, social media advertising, public relations, content marketing and trade shows. It’s important to note, however, that there is no silver bullet: Successful marketing will look different for every brand because the audience is always going to vary. But if you invest some time and money into your branding and put the effort into getting it right, you will see results, even if they are not immediate. Focus not just on the opening, but what you want your marketing to look like six months post opening once the buzz has died down.
And this is the restaurant business, so make sure hospitality and customer experience is great out of the gate. The last thing you want to do is spend a ton of money marketing to get people to try you out, and then not have the operations in place. You generally only get one chance with customers, so make it count.
Have Processes in Place
The word ‘process’ spooks some people, but truthfully, all processes do is make your life — and the life of your franchisees — easier. If they don’t have to spend time scrambling to figure out their next steps or working on tasks that could be incredibly simple, such as picking a sign company to use, choosing an internet provider, and so on, they can spend much more time focusing on the most important thing — their new business, customers, and employees.
Oftentimes, people begin looking for franchises for exactly this kind of support. Franchisees want someone who has been in their shoes before and can help guide them from a budding business owner to a flourishing franchisee. Having these kind of processes and support systems in place can set you apart from other franchisors who may not be as intentional with their startup and support processes. This includes operations manuals, brand standards, and marketing plans.
Be Ready to Adapt
As 2020 has taught everyone in the restaurant industry, adaptation is key to success and survival, especially during challenging times. Even before the pandemic struck, our team focused heavily on working with brands that are ready to adapt and accommodate the needs of their customers. Take mobile ordering, for instance — leading up to 2020, this option saw a steady increase in popularity, and suddenly it caught on like wildfire. Restaurants that had caught on to the trend and made deals with third parties, or better yet, created their own apps, found themselves ahead of a curve that others may have not even considered until they absolutely had to.
The COVID-19 pandemic saw many restaurants adapting in ways they might have never imagined, and it’s important to note that once the customer gets a taste of ultimate convenience — take curbside pickup, for example — the consumer won’t want to give up the convenience, whether they are having their quick serve chicken tenders or 5-star meal being delivered through their car window. Going forward, the expectations of restaurants will be higher than ever, and being able to adapt to customer demands will likely determine which brands succeed.