Advisory Nov, 14 2009

Critical success factors for a franchisor

Franchised businesses have a tendency to succeed than self owned businesses provided if the franchisor plays his role dedicatedly. We offer you a list of must-haves to make your franchise business a success

By Ramanjit Kaur
Feature Writer
Critical success factors for a franchisor

A successful entrepreneur adopts the franchise model to expand his already established business. He does it, with the help and money of his prospective franchisees. The factors behind the success of a franchise business can also hold responsible for the business collapse, if not handled carefully. Therefore, it is advisable to do a good homework on the franchising plan before foraying into franchising. Let us discuss the various factors of franchising on which a franchisor has to work to keep his franchise system safe and sound.

  • Local flavour – It is the primary factor that decides the fate of a franchising business. A franchisor often makes this mistake by remaining strict in terms of the set standards of business. As a franchisor, you have to understand the demands of the people that change with regions and then cater to their demands as per the local flavour. Therefore as a franchisor, it is necessary for you to come up with an idea that relates the best with your local customers. This would be possible only through the local franchise partners as they understand the dynamics of local markets.
  • Sound franchise relationship - As a franchisor, you should not be ignorant about certain attributes that can undermine your franchisee’s success. Every franchisor must have the art of building healthy relationship with his franchisees as it is the key to success. You can build good relations with your franchisees by:
  • Providing them every possible support and back-up they need during the establishment of a franchise and even after the franchise outlet is operational.
  • Keeping a track of information about their franchise performance and directing them from time-to-time to enhance their skills.
  • Treating all your franchisees as per their requisites as the needs, interests and goals of every franchisee varies.
  • Your level of interest and consistency in dealing with your franchisees make them think that you genuinely care for their success.
  • Maintaining uniformity – The factor of utmost importance for making a franchise system succeed is to ensure uniformity in terms of store outlook, infrastructure, services and products. As a franchisor, you have to keep in mind the local needs and demands while maintaining uniformity and standards of quality across every franchise chain. This is necessary as people already know the brand and therefore expect similar quality, services and ambience at each franchise outlet.
  • Protecting franchise territories –As a franchisor, it is your duty to offer exclusive rights to all your franchisees to sell the products or services within a particular geographic territory. It makes the franchisees safe from the competitive pressure of other franchisees thereby securing the chances of success of your franchised business.
  • Marketing support – Franchisors spend a lot of money on marketing their brands across the nation. But nationwide campaigns sometimes do not work effectively at local level. Therefore, a franchisor must guide his franchisees regarding the marketing strategy that help them build the brand on local level.

Abide by franchise agreement terms: The franchisors are always advised to remain abide by the terms and conditions mentioned in the franchise agreement. Otherwise it will leave a bad impact on franchisees or sometimes it may lead to litigation.

The success of a franchise system reflects the success of the franchisees. Therefore, as a franchisor you need to chalk out a franchise plan prior to making a foray into franchising.

Related: Healthy relations for flourishing franchise

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