Keys for consistency -Restaurant Franchise business!
A franchise business varies between the different industries, it might be easier to franchise a business that sells Products & Services but we should agree that the biggest challenge faced when franchising a restaurant business!
A restaurant chain is as strong as its best-performing franchisee and as weak as its lowest-performing franchisee!
This means a Franchisor is aware that the solution for improving their business is to improve the weakest unit to perform as well as the best one! may sound easy but those involved in the franchise world are aware of the many complications/reasons that don't allow them to make that happen.
One of these reasons is related to the "Criteria of selecting a franchisee", Many franchisors tend to accept a new franchisee into their system simply because of emotional connections Or Prestige! Yes, Prestige, as someone who might have multi-business concepts and who is a successful business person is not necessarily going to be a good franchisee!
Criteria for selecting a franchisee should be the first defense line, someone once said that the moment you sign a franchise deal is when you should get ready to go into court! well, you possibly have a high percentage to reduce that likelihood of going into court if you select the right candidate to join your business family!
Another important factor is to have a well-designed franchise agreement that is comprehensive, easy to read, understand, and execute, in many cases, franchisors do not want to spend much on developing a well-studied "Franchise agreement legal document" so they tend to have this done by a consultant that offers the lowest fee to have this done! Additionally, a restaurant business franchise agreement should be designed by an F&B experienced and specialized legal entity and not by someone who is a stranger to the industry, as it has so many particularities...
Based on the above, the equation becomes An experienced /Passionate Franchisee + A well-designed franchise guide for the business = A healthy and clear relationship between Franchisor and franchisee!
The next step is to select the right location, this is where most fail, I have personally worked with an international franchisor that didn't have strong criteria for location selection and simply accepted the suggestion of a new franchisee to build a 2 M $ restaurant in the back side / prestigious entrance of a mall and ended up closing down after 6 months from opening only!
I also know a CEO of a franchise business who spends time counting customers, taking notes, and recording the demographics in person for a specific location for at least 3 weeks during different time intervals in order to decide if this is potentially the right location for their next franchise business!
Yes, your actions would reduce the risks that your business can take after making decisions! you will save a lot of money and time for both franchisor & franchisee by taking time and studying objectively each and every step and decision especially when it comes to location selection!
The equation became: Good franchisee + well-designed business bible + great location! getting better right?
Now will be the time to ensure that the new location is ready to rock and roll and the first and most important element would be "People", having a solid recruitment and hiring system is very critical for any business success!
Next is definitely training, and this has to be done by both the Head office & by one of the best-performing franchisees this is where synergy will lead to the longevity of a business module!
Great staff and perfect training and support is definitely going to lead to "Consistency ", adding to that an honest franchisee that doesn't tend to buy cheaper products out of the APL to save some bucks on the expense of the brand's reputation is what leads to a great franchise.
A few other elements such as HO/Franchisor levels of engagement with their franchisees, recognition systems, Celebrations, Support, audits, investment in the right technology, and transparency are all keys to success!
Sometimes, ticking all of the above might not be enough to ensure the success of a franchise business, this is when it can be related to the concept itself, the lifetime cycle of certain business modules is not sustainable, and new trends might come into place and the concept that you have will suddenly become outdated and whatever you do is not enough to ensure continuity and profitability of the business, this is where a franchisor should be resilient and adapt with the market changes and a franchisee should not buy a franchise only because one location of this franchise is doing great!