The Necessity to Revamp Franchise Operations and Systems
When you grant a franchise, one of the most important takeways for the new franchisee is an operating system for the franchise. Every successful corporate franchise has a well defined operating system. In order for a company to grow and continue that success, the operating system must be followed.
But, once the original operating system is established, it must be refined and tweaked as changes take place in its industry and within the company. An ongoing challenge for every business, not only franchise companies, is how to improve their operating systems in order to better manage results.
To do this, a company must take a serious look at the current systems, analyze them and then proceed with determining the next steps towards improvement. All companies should have this as part of their ongoing plan, although many do not take the time for this important part of their operation.
A recommended process is as follows:
- Analyze and identify the gaps in the current operating systems
- Prioritize which gaps need immediate attention
- Identify strategies and tactics to close the gaps
- Establish follow-up processes to ensure progress is being made on closing the gaps
- Train and develop your people with the necessary skills, knowledge & abilities to make their behaviors more effective & sustain performance over time.
Areas in the company that need to be analyzed in order to begin the process are:
- How customer-centric is your business?
- How effective are your leaders?
- How effective is your strategic, operations & financial planning at the corporate, corporate-franchisee and the franchisee level?
- How does your process of “selling” and “granting” franchisees stand-up to “best practices” developed by other successful franchise companies?
- What is the current state of your franchisor/franchisee relationships?
- What is the role, function & purpose of your field consultants? What processes do they use with the franchisees?
- How effective are your pre-opening and operations manuals?
- How effective are your new franchisee training programs and your on-going training programs?
Once the company has identified the above areas, the real work begins. It is possible to tackle some of these areas and issues with internal staff. However, the more difficult issues and areas where improvement is needed may well require outside consulting, guidance and assistance. One of the most challenging parts of this process is to be honest as you analyze and identify the gaps. It should not be perceived as a negative that there are gaps, but should be looked upon as opportunities to improve your operating systems in order to best manage the results in your franchise system.
To learn more about this topic and others, go to Management 2000’s website at www.mgmt2000.com to see a complete list of franchise management services and seminars offered on many franchise related topics.
7 Options for Financing When Buying a Franchise
The primary difference between equity financing and debt financing is that with debt financing, you will have an obligation to pay back the borrowed sum at a stated interest rate, but you will retain control of the business; in equity financing you are giving up a part of the business to an investor or investors in exchange for their financing. The investors may claim some control of the business operations; they will also have some ownership in the assets and potentially will take a share in the earnings. You will not have a set debt obligation to repay as you would with a monthly loan payment to a bank. The investor will be taking a risk as to when and how much of the investment he or she will recoup, as well as whether there will be a return on the investment.
Getting into Baby Boomers Wallets
Savvy businesses have been marketing to the Boomer generation for years. But interest is accelerating now that Boomers are approaching their 60s. In this day and age, no business can afford to ignore the economic realities of this phenomenon, with one in three adults currently at least the age of 50. The target audience for these marketing schemes should be adults aged 54 to 64. They have the deepest pockets, with an estimated average net worth of $210,000 -- higher than any other age group.
The Franchisee & Franchisor’s Point of View
Many of the characteristics of the perfect franchisee are shared by both a franchisee and a franchisor, but there are also some slight differences. A franchisor is more concerned with how an individual franchisee will fit into their business as a whole, and not necessarily how the single franchise will operate on a day to day basis (although that’s still important to them). Meanwhile the franchisee cares almost exclusively about the success of that individual.