A franchise network grows only if a franchisor succeeds in keeping the older franchisees in the network. For ensuring the franchisees to stay in the franchise network, a franchisor needs to carefully analyse the franchise system and fulfil his duties and
There is no doubt that franchising is a brilliant way to outspread one’s business across the globe. Franchising largely depends upon the skills of the franchisor to grow and maintain its network throughout. So franchisor must know to build and manage the franchise network efficiently. This article will provide precise information regarding how a franchisor can build and manage his/ her franchise network proficiently.
For a franchisor, managing his/ her franchise network is equally important to building it. A sound franchise network not just clinches new entrepreneurs into it but also ensures good profit making. As Rod Young, E D, DC Strategy says “A good franchising is so much better than independent small business operations but a bad franchising is so much worse,” quoted by Professor Andrew Terry. So, if a successful entrepreneur takes up the franchise route to expand his/ her business, s/he needs to manage the franchise network properly in order to gain maximum benefits.
Basic elements of maintenance
A franchising business works because of its franchisees. Therefore, a franchisor has to manage the franchise network and simultaneously keep on adding new franchisees in the franchise system. As Rod Young says, “No franchisor can grow his/ her network without maintaining the franchise network.” The three important elements that play a significant role in managing the franchise network include:
Building healthy franchise relation
A franchisor has to build a healthy and long lasting relationship with all his/ her franchisees to lay a strong foundation for success. To build sound franchise relations with the franchisees, a franchisor has to take the following steps:
Innovations in the development
Introduction of innovative ideas would ensure well functioning of business operation smoothly. As Young says, “A franchisor cannot stand still. S/he has to introduce new ideas or concept in his/ her franchising business to keep a pace with customers’ sophistications and demands.” For example the franchisor should organise franchise meets from time-to-time in order to let the franchisees meet each other. Such franchise meets also help in generating new ideas to improve and run the franchise business more efficiently.
Managing a franchise network is a complex process but to run a successful franchise business a franchisor must have the skills and knowledge to manage it effectively. A franchisor has to fulfil all his/ her responsibilities and duties in order to avoid the loopholes in the franchise system that can create problems later. As Dawn Stallwood, Head of Hotel, Leisure and Franchising Team at UK law firm Thomas Eggar LLP says, “A franchisor has to look after his/ her franchisees as they are the route to revenue for the franchisor’s business.”