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4 Warning Signs You Should Be Working with a Franchise Consulting Firm

Franchisors should expect their franchise brand to experience hiccups and hurdles along the way. It’s the nature of the beast. But, if any of them last for a prolonged period of time, it may be a signal that the business is in trouble. It may be time to seek advice from a professional in the industry.

The following signs indicate you should be working with a franchise management services firm, also known as a franchise consultant:

  1. Your Franchise Model is Broken

Your franchise system is like a chain – it’s made up of many parts linked to each other. Replicability of products or services, operations, distribution, support and more make up a franchise system. If any one of them breaks, your franchise system can fall apart.

If you’re struggling to duplicate the business model in multiple markets, operations, distribution and support will suffer. Franchisees will resent their franchisor, which can lead to poor franchisee validation. Growth can come to a screeching halt. When the franchisees fail, the franchisor fails, too.

A franchise consultant can assist even before you begin franchising by helping you decide whether your business is meant for franchising. If you decide franchising is indeed the best way to grow your business, the franchise consultant can help develop each part of your franchise system.

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If you are already franchising and you’re stuck because growth has stalled, a franchise consultant can conduct a detailed franchise audit to point out where the financial and performance gaps exist. From there, they can work with you to develop a plan to fix the system and close those gaps.

  1. You Need a System Audit

An audit will provide thorough inspection of each part of your franchise system to determine where problems are occurring. If you have picked unqualified entrepreneurs to be your franchisees, they may be contributing to lackluster growth. An audit will gauge the compliance of franchisees and how closely they follow the business model, as well as detail their performance against company or industry benchmarks. Performance enhancement plans can then be developed for each franchisee to succeed.

If you have developed efficient and proven systems designed to make each location profitable, your franchisees should be following them. Your systems are a large part of what makes your business replicable. Usually, franchisees who follow the playbook will be successful. But, if they are not optimizing the systems, their performance will lag. It will show up in the product or service provided to the consumer. Consumers will then turn away and seek out your competitor. And, underperforming franchise locations typically yield smaller royalty fee payments.

A franchise consultant can conduct the audit and help develop the right course of action in the areas that need it. They can also help you avoid ever needing an audit if you work with them at the beginning of your franchising journey. A consultant will help you determine which persona makes the best franchisee, who typically follows your kind of system the best and more.

  1. Planning was Insufficient or Lacks Execution

Building your operations manuals, systems and completing the franchise disclosure document (FDD) are only part of planning your growth strategy. While those things are important, you still have to develop a plan to build infrastructure and put in support mechanisms. Poor planning will lead to unsuccessful franchising; it’s one of the root causes of stagnation and is a clear sign you need the help of a franchise consultant.

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Some franchises outright fail because the well-laid plans were not executed properly. Effectively executing the plan is a team effort (not individual) that requires discipline and focus. Often, franchisors get sidetracked by other issues, hence the need for a management team of dedicated individuals.

A franchise consultant – with knowledge of various industries, including food, fitness, retail, home services and more – will be adept at plan development and the execution of plans. They will help set priorities, collect and analyze data and objectively evaluate your strategy.

  1. Weak Infrastructure Due to Lack of Capital

Emerging franchisors often budget just enough to get their systems in place, create manuals and develop their FDD and franchise agreement. But, that is where their capital dries up. Typically, they need at least twice the start-up amount they originally planned to truly be prepared to spend money where needed, including infrastructure development.

When you don’t have enough capital, infrastructure – systems and support – suffers. This often manifests when a brand grows too quickly by adding more franchisees than it can handle. The systems and support in place do not grow quickly enough to keep pace with the growth. When systems do not reach franchisees fast enough and there’s not adequate support, franchisees suffer. Ultimately, the franchisor suffers, too.

Meeting With a Franchise Consultant

Franchise consultants are skilled at capital planning and will ensure you have enough before you begin franchising. They can also help you find the capital you need and develop a plan to enhance your faltering infrastructure. It often starts with helping your original franchisees first.

Finding the Right Franchise Consultant

A qualified consultant will help identify the obstacles to growth and develop a plan to fix the problems immediately. The franchisor can gain or regain momentum. An effective franchise consultant will have industry experience and work with a team.

With more than 30 years of experience, Winmark Franchise Partners can help identify and address the warning signs before problems get out of hand. At Winmark Franchise Partners, the ability to find the root cause for stagnation, pinpoint why bills are not getting paid, identify why your management team is not effective and more – and offer solutions. We have the capacity to work in any number of ways with our franchise clients. If you are interested in putting your franchise on the track toward growth, contact us here or at (844) 452-4600.