Top 3 Elements for Franchisee SuccessAug 15, 2023
Even though there are hundreds of thousands of franchisees around the world, not all of them are successful. Many do okay, some fail, and only a few are able to go from a single unit into a multi-unit enterprise that eventually becomes an empire.
- So, what does it take for franchisees to achieve success?
The truth is that there’s no secret formula, and it doesn’t depend only on the brand or the location. But there are a few things that those top-performing franchisees have in common.
Certainly, there are many others. But these three are probably the most important ones that you need to know to aspire to be a successful multi-unit franchisee.
1. Excellent leadership skills
The franchise industry is not just about acquiring the rights to operate a brand and building a profitable business. You are in the people business. What that means is that, as you are building your empire, who you are as a leader matters a lot.
As a franchisee, you have your personality, desires, hopes, and way of leading and managing your business. But you have to become the leader that people are looking for.
But mind that the concept of leadership is very different from what it used to be. Times change, generations change, and you have to adapt to whatever the current workforce requires.
You also have to be aware that your employees, leaders, and everyone outside of you are different from you. It may sound simple, but having that understanding lets you adapt yourself and create different systems, processes, and leadership skills to apply to all the people outside of you.
It is not easy and it takes a lot of care, study, and analysis to understand what type of leader that is, and then to do the work and develop that in yourself, as well as in others.
Another tip: you will have a better chance of being the type of leader people look for if you analyze your leadership through the human being lens.
Again, it goes back to people and you have to accept everything that comes with that. Including the fact that you'll be hiring people without job experience because this industry tends to be the entry to the working world for many young ones.
So as a business owner, you must embrace becoming a teacher, a coach, and even a parent, that will teach this new workforce how to be great employees and live up to that greatness. All under your leadership.
If you can master the leadership skill, everything else that comes with franchising will be easy. That’s why this is the hardest ability to acquire and the one you should spend the most time developing.
2. Great business acumen
When you buy a franchise, you acquire a proven brand that gives you the product, the service, the procedures, and the image of that brand to obtain revenue. But the franchisor does not guarantee profit.
- That’s why understanding the business in great detail is critical: this skill will allow you to turn revenue into profit.
If you understand what are your most important KPIs, how to interpret your dashboards and financials, and what numbers tell the story of your business, you’ll be able to turn those indicators into profitability.
You also need clarity on the drivers, actions, and behaviors that change those KPIs into the best possible number. As well as what are the systems, processes, and procedures that will allow you to maximize that profitability to the highest level.
Executing these consistently will help you produce profitable results all the time. The better you understand this, the better you’ll implement it, and the better your team will execute the business. And, therefore, the more profitable and successful you'll be.
3. Access to money
I’m sure you will think this is challenging. However, accessing capital for your business is probably the easiest part of these three elements because there are many ways where you can look for it. Either by the traditional way, going to banks, or through private equity or family and friends.
- Whichever you choose, you need to research what they imply and what is the cost of that capital to discover the most convenient, effective, and efficient one for you.
Invest time to investigate and ask questions. Meet with those private equity firms, bankers, and even relatives who are willing to lend you that money, to find out all you can about those sources of capital.
That way, when you require funding, you’ll know where to go. That is the trick about access to capital: finding it before needing it!
Again, this is one of the easiest parts of becoming a multi-unit franchisee because if you demonstrate success, there will be a lineup of people wanting to invest with you because they’ll know you’ll be a good bet.
But still, it requires skill and you still need to be prepared to have the capital when you actually need it.
If you'd like to learn more about what it takes to be a successful multi-unit franchisee, let us help you! The American Franchise Academy offers several programs to support you as a franchisee as well as the leaders in your organization, so you can acquire the knowledge, tools, and resources you need to thrive.
To learn more about this, visit: https://www.americanfranchiseacademy.com/programs
- Are you aware of the type of leader that your employees want you to be?
- Analyzing yourself as a leader, what are your weakest skills that you need to improve?
- How much of an expert are you at reading and understanding your PNLs, KPIs, and critical drivers of your business?
- What type of guarantees can you give your lenders to ease your access to capital?
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