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How Do You Know if You Have a Replicable Business Model?

Entrepreneurs often cite growth as one of their primary business goals, but few know how to catalyze this growth. Replicability is the key to scalability within any business, particularly within the franchise space.

A replicable business model refers to your ability to consistently and reliably duplicate your product, service or business. With a replicable model, your business could theoretically serve a boundless number of customers and uphold your brand standards each time. Before growing your business through franchising, you need to first ensure you have a replicable business model or you will be setting your franchisees – and yourself – up for failure.

Consistency and Predictability

By definition, a replicable and scalable business model means that you serve the greatest number of customers possible through the most cost-effective means. There is little room for customization in a replicable business model. The actual products or services themselves may differ over time, but the quality of the product or service and the processes behind how it is delivered to the end customer need to remain consistent and predictable.

Waitress With Customers

In a franchise system specifically, you, as the franchisor, do not own the business and physical assets in each location. You own the franchise company, the brand, and the business system, but the unit-level operations – and reputation – of the brand within a certain territory or market is controlled by the franchisee. It is up to your franchisees to consistently deliver and uphold your brand standards, or the brand as a whole will suffer.

The best way to protect your brand’s reputation and ensure the consistent quality of product or service is by creating a schematic, systemized means of delivering your product or service to the end consumer. These operations should be easy enough for all franchisees to follow, so they can each achieve at least minimum operating standards. After establishing these easily-replicable operational guidelines, you need to offer training and ongoing support, to ensure your franchisees continue to maintain a positive and consistent image for your brand. A strong product or service is the key to a positive reputation and a replicable model across markets, so make sure your franchisees are consistently delivering on the proven model you created.

Competitive Differentiation

When considering the replicability of your business model, you need to also determine what sets you apart from competitors. Differentiation is the essence of strategy and should be apparent in every aspect of your business – from your core mission to daily operations. As you sharpen your differentiation, you will have a greater competitive advantage and make it easier to scale and grow your business.

Teacher Drawing on Chalkboard

The power of a replicable model lies in the way it allows you to turn your brand’s differentiators into routines, behaviors and systems. Everyone in your business will understand these different operations, and how they align with your company’s central mission, so they can more easily comprehend the company’s strategic positioning and justifiable growth path. Keeping these differentiators at the center of your growth strategy and company as a whole will allow you to maintain the model that led – or will lead – to your company’s initial success while expanding.

Demand across Markets

Another cornerstone for a replicable business model is across-market demand. Your product or service needs to be in high demand in different markets in order for you to repeat and grow your franchise brand in different territories. If your product only serves a niche demographic, your business model is not fit for replicability elsewhere.

Table at Restaurant

It can be difficult to measure demand in markets that you have not yet broken into, but there are several ways you can approach it. Research how well different areas – that are comparable to your initial market – are performing economically to get a better sense if it is the right time to expand there. Understand whether there is a strong demand and customer base for your product or service in the market, and study any competition. Finding as much data on potential competitors’ sales can be a good indicator for product demand in a particular area.

Key Takeaways
Create operational guidelines that franchisees can consistently and easily follow, develop your strategy around your competitive advantages, and make sure there is a need for your product or service across all markets. All are essential for a replicable business model, which is oftentimes the necessary impetus for growth. Replicability will ensure success across markets – from optimizing operational efficiency to maximizing revenue.

With 30 years of franchising experience and more than 800 franchise owners representing 1,200 locations for five brands, Winmark Franchise Partners can help you develop your recruitment strategy. As a franchise advisor and incubator, we have the knowledge and capital to get your brand on the right track. If you are interested in franchise growth, contact us here or at (844) 452-4600.