Tom’s Franchise Information Blog
Top franchisors face the daily challenges associated with having to manage day-to-day relationships with an ever-increasing number of franchisees and area developers. The complexity of coordinating among so many stakeholders can represent a huge challenge - especially when attempting to maintain a consistent brand image across the entire franchise network while keeping marketing costs down. Not only are these efforts typically resource-consuming for the franchisor, but they can also result in unnecessary frustration and costs for franchisees.
However, with this burden comes an opportunity for top franchisors (and those aiming for the top in their niche) who learn to effectively manage integrated promotional goods and direct mail campaigns.
Here are 7 tips for how top franchisors can create integrated promotions and ad campaigns for their organizations:
Tip #1: Maintain a consistent brand image even though promotional materials are sent out by different franchisees: A healthy brand image is vital for franchise organizations wanting to go the next level in sales and reputation. Franchisors who leave the responsibility of developing promotional campaigns to the individual franchisees risk losing out on the opportunity to maintain a consistent, integrated brand image across the organization. This is because different franchisees - even with the best intentions - will end up creating different creative (i.e., the look-and-feel of the ad or mailer) from one area to the next. This type of inconsistency can quickly erode the viability of the brand in the eyes of customers. However, with an integrated campaign whereby the franchisor pre-approves which promotional materials can be sent out and allows franchisee access to those materials via a secure Internet site, 100% brand integrity is achieved.
Tip #2: Find ways to save mon (more…)
Becoming a franchisee is a personal decision. There are many factors that you’ll want to take into consideration when evaluating whether or not a franchise is the right choice for you.
A franchise has a lot to offer the right person. This includes a proven system of running your business that will stay with you for as long as you own your franchise. While this has proven to be a successful method of starting a business venture, it isn’t always the right method for everyone.
Perhaps you are just exploring the idea of purchasing a franchise, or you’ve seen a franchise opportunity that you think is right for you and now you’re wondering if you’re cut out of the right cloth to be a franchise owner. Before taking the next step in this important process, you’ll want to carefully evaluate yourself, your resources, and your interests.
Evaluating Yourself
- Owning your own business requires a tremendous investment of personal time and energy. The average workweek is not Monday through Friday 8-5-rather, it is a responsibility that requires you to be in charge of your business every moment. The norm for franchise owners-especially in the first few years of operation when you’re building your business-is 60-70 hours a week. It takes a lot of hard work to start and run a successful business, even with the support of a franchise network behind you. On the other hand, the rewards of operating your own venture are very high. While considering whether this is the right opportunity for you, ask yourself if you are willing to invest this amount of time into running your business.
- A new business takes time to establish and grow. While the franchisor has developed the processes required for running your business, you are still responsible for the day-to-day success of your operation. There will be a lot to learn (more…)
If you are looking to grow your business using the franchising model, then there are certainly lots of issues that you have to consider beforehand. It’s also wise to consider consulting with a suitably qualified specialist. Franchising is a model used by many large businesses, including Subway and McDonald’s, and has inevitably contributed towards their rapid expansion and global presence.
Doesn’t Dilute Equity
When you finance the growth of your business through franchising it allows the existing shareholders to maintain a greater share of equity within the firm. This means that going forward they can run the business in a way that they see fit, and capitalize on opportunities when they arise.
Scale Quicker
Your business should be able to scale much quicker when you opt for the franchising model. Each time you enter into new markets, and sell more franchises, your balance sheet will become stronger through franchising fees. This is in comparison to other businesses, where they will often have to heavily leverage their business or dilute equity to finance this.
Limit Losses
Dependant on the structure of your franchise agreement it is unlikely you will be able to make a gross loss from selling a franchise in any giving trading year. Most franchisees pay a yearly management fee to the franchisor, which is a percentage of revenue. This means even if one particular franchise is not profitable, this will not impact the business as negatively as it otherwise would. This makes the business far more stable with more predictable earnings.
Well Managed
It is likely that each franchise will be well managed when the owner is so closely vested in its success. This allows for your business to worry about micro-managing less, and worry about long-term strategy more. It also means you will (more…)
