NFA Franchise Consultants

Franchise Operations

Keys to Success in Franchise Operations

Reflections of a Franchise Consultant: Franchise Operations

Stephen S. Raines
President, National Franchise Associates
Atlanta-based Franchise Consultants and Franchise Operations Specialists

In my over three decades of experience as a franchise consultant and working with franchise operations, I am often asked “What makes one company succeed in franchise operations while another doesn’t?”

Rarely is there a single reason for success or failure in franchise operations.  Here, I will examine some of the many factors that can help Franchisors create successful franchise operations.

Perhaps one of the most important common elements found in successful franchise operations   is the attitude and motivation of the Franchisor.  Franchising is a long-term business growth strategy.

It is not an easy, fast solution to a corporate cash flow crunch.  Nor should franchise operations be undertaken with an unproven business model -- no matter how brilliant the franchise operations concept or how seemingly compelling the idea may be.

Especially in these tenuous economic times, it is virtually impossible to convince others to invest in franchise operations that have not yet been proven to work.   At National Franchise Associates, it must be very special circumstances before we will recommend to businesspeople to turn untested concepts into franchise operations.

Instead, the business owner who wishes to succeed in franchise operations must first create a workable prototype with demonstrated demand and effective systems and procedures.  This business must be able to be duplicated by others.

Next, the owner must take the time to put together properly-structured franchise operations.  Special care must be paid to how the franchise operations will generate enough revenues to fund the Franchisor’s growth and maintain its Franchisee support programs.  In addition, the company must ascertain that its Franchisees can make sufficient money to survive.

As well, successful Franchisors are careful to grant franchises to the right Franchisees – people who share the Franchisor’s vision for the company, have the proper skill set to operate the business and possess the requisite resources.

The franchise company must appreciate that it serves two sets of customers: (1) its Franchisees and (2) the end-line customers who purchase the Franchisees’ products or services.  Franchise operations must be structured in order to enable the Franchisor to meet the needs of both customer groups.

As franchise consultants, we have seen the franchise operations that always keep their focus on meeting the needs of both their Franchisees and their end-line customers achieve the greatest success in franchising.