Before your franchise brand can begin to raise its profile, there are a handful of questions that you should ask yourself:
- Is your concept and your underlying business system performing the best it can?
- Is your franchise system healthy?
- Are your franchisees receiving a solid return on their investment?
If the answer to any of these questions is no, then there is still some work to do before you can start to expand further.
However, if the answer is yes, then it’s time to go to work.
Overcoming Initial Financial Challenges
Every emerging franchisor has to overcome the challenge of growing quickly enough to reach royalty self-sufficiency, but not so fast that their infrastructure implodes or that they ignore early warning signs of brand model weaknesses. They also have to balance receiving enough exposure to franchise candidates to help them grow, meaning they have to invest heavily in PR, advertising and marketing in franchise development. Oftentimes, emerging brands begin to expand far too early or before they even have a strong proof of concept.
“Most emerging franchisors are short on capital and patience,” said Steve Murphy, president of franchising for Winmark Corporation. “They go into franchising without having a solid plan in place, they come in undercapitalized, and they want to grow too fast. The best advice is to approach franchising with discipline and effective planning.”
Having a well-thought out plan and the proper access to capital is key in emerging brand growth. If you find that things are not working with your franchise system and your franchisees are not profitable, then stop everything else you are doing and fix those issues first.
“Adding more franchisees when you haven’t worked out all the kinks will only create a bigger problem and lead to unhappy franchisees and a broken franchise system,” said Murphy.
This problem stems from emerging franchisors constantly wanting to grow rapidly without considering how it will affect their current and future franchisees. Many emerging franchisors are interested in increasing revenue and make too many early mistakes in selecting candidates that adversely impacts the brand before it ever gets off the ground.
Perfecting and Growing an Emerging Business Model
After overcoming the initial growing pains and challenges, it’s time to validate the concept. Give yourself plenty of time to work out any kinks and get the model right.
“Far too many people today are open less than a year and they are already talking about franchising,” added Murphy. “Slow and steady wins the race in franchising, so plan accordingly.”
Once you experience success in one market, look to grow in another market outside of the first one. Prove that the model is not just successful because of the particular consumer in that area. In order to ensure your concept will be viable in other markets, you must study your current customer demographics. Understand who your ideal customer base is and how they behave. This knowledge will prove invaluable when it comes to identifying future markets with consumers who will mimic that behavior.
Ensuring Consistent Brand Growth
One of the biggest ways to grow your brand is to ensure that each unit you sign actually opens and opens successfully. A “signed but never opened” agreement is not very promising, especially to prospective franchisees. Your new units need to be a stronger validator, even more so than your established locations. Prospects are interested in concepts that are ready to hit the ground running and not ones that will try their patience.
Maximize your exposure in social and digital media, leverage your existing assets (Facebook, LinkedIn, Twitter, blogs, website, etc.) to get the most out of them, and be sure that you have a plan and can execute consistently. Once that is in order and you begin seeing consistent results, turn the budget toward external spending with digital advertising, social advertising, and public relations.
Utilize your assets and leverage them across all social and digital platforms. Use your franchise locations and your franchisees to help tell your story and market the fact that the brand is a franchise. And use public relations to help build awareness and get the word out cost effectively. Be consistent with sticking with what works in terms of franchise development. If you find something that produces leads and quality candidates, invest more money in those efforts.
“If you are spending money in areas that are not producing, reallocate dollars to the areas that are working,” said Murphy. “Never stop managing that effort so you can ensure the flow of good leads never stops.”
Seek Help From Franchise Experts
With 30 years of franchising experience and more than 800 franchise owners representing 1,200 locations for five brands, Winmark Franchise Partners can help your emerging franchise brand grow. We can help your business expand into a successful franchise by providing the guidance you need. As a franchise incubator, we have the knowledge and capital to get your brand on the right track.
If you are interested in franchise growth, contact us at (844) 452-4600.