Franchise System Success

Is there any sure formula for franchise system success? The safest answer to this question is “No.” In business, there are never any guarantees when it comes to systems involving contextual factors like other people and entities. There will always be some element of the unpredictable about them. You can anticipate, speculate, and determine possible outcomes in your franchise system, and you can work towards them. In the best case scenario, everything will work out well and you will succeed beyond your wildest expectations. In the worst case scenario, an unexpected factor can undo all your well-laid plans, and if you don’t have any back-up arrangements, you will be in a fix.

This is not unique to franchising. It is the way of the business world.  You may plan, coordinate and implement arrangements, but there are no guarantees that you will profit. However, if you are open to creative ideas, and if you are willing to put in all the hard work necessary to get things started and then to sustain them, you have some hope of achieving success.  Subsequently, the key to doing well is to learn what conditions, decisions and actions were behind your prior mistakes, and then to avoid replicating them. Experience, whether direct or indirect, is the ultimate teacher in business. It is complemented by the courage to take calculated risks and the prudence to lay down a fall-back option ahead of time.


The Franchisee Factor in your Franchise System


For your franchise system to work, it will have to achieve a balance between meeting your own financial goals and ambitions and enabling your franchisees to thrive. As the franchisor, you will have control over such factors as marketing, franchise design and operation, and product quality. However, you will not have the ability to force your franchisees to work within the limits you have set. They will have to be amenable to the terms of your franchise agreement in order for your franchise relationship to work. They will also have to have managerial skills and abilities commensurate with the needs of your specific franchise. It would do you well to look into their backgrounds before selling franchising rights to them.

It is also important to give your franchisees a breathing chance when assigning them franchise territories. You might think that setting up numerous franchises in a particular territory will maximize your potential revenues. However, if you miscalculate, you will cause some of the franchises to go out of business. This will only undermine your franchise system.

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