Overcoming the Challenges of Scaling a Franchise

Scaling a franchise is an ongoing challenge for every franchisor. The success of a franchise system depends on the ability to continually grow the business.

Scaling a franchise is an ongoing challenge for every franchisor and franchise executive. The success of a franchise system depends on the ability to continually grow the business by branching out into new markets and connecting with a larger audience. Follow these tips to overcome some of the common challenges of franchising and achieve long-term success with your venture.

Establish Sufficient Funding

scaling a franchise

Insufficient capital is one of the primary hurdles to scaling a franchise, particularly in the earlier stages. Establishing a new franchise is more costly than some entrepreneurs realize. You’re responsible for obtaining the appropriate permits, developing training materials and programs, and marketing the new franchise system. Make sure you’re prepared for both the early costs of establishing a franchise as well as the annual fees that you’ll incur from maintaining paperwork, providing ongoing support to franchisees, and regularly rolling out fresh marketing efforts.

Vet New Franchisees Carefully

Competition is stiff in today’s saturated marketplace of franchises. Franchisees have their pick of companies, so it will take a significant amount of effort to draw the most qualified candidates for your company. Don’t settle for any franchisee who can put up the cash. You need dedicated individuals who have the wherewithal to last through some of the common storms that can occur in the early stages of a new franchise location.

You should also make sure that you have a strong staff of franchisors. Look for candidates with outstanding people skills and a strong network of connections. These franchisors can help you connect with the kinds of franchisees who may become multi-location franchisees, supporting rapid growth for your company.

Banish False Expectations

Scaling a franchise is impossible if your franchise locations close as fast as they open. You must establish stable franchise locations with real staying power. Part of equipping your franchisees for success is giving them appropriate expectations. If your franchisees expect instant success, they may bail on the project long before they’ve put in the necessary time and effort to see significant returns.

Make sure your franchisee training includes a long timeline that emphasizes how franchisees need to settle in for the long haul. Give them very realistic expectations so they’re pleasantly surprised when they run royalty calculation software rather than being disheartened with the results.

Provide Ongoing Support

Franchisor responsibilities include both recruiting new talent and keeping existing franchisees happy. Scaling a franchise successfully requires establishing a strong foundation for your system. Make sure you have tools in place to accurately assess your sales. Custom reporting and powerful analytics will help you turn dry data into actionable information. Franchisors and executives should strive to provide franchisees with the resources that they need to overcome business challenges. This support encompasses things like offering insights into how to better market to their audience and supporting the roll out of new services better suited to a certain locale.

Establish a training and support system that addresses the common challenges of franchise operations and provides your franchisees with the tools and information they need to succeed. Keep an eye on your franchisees long after their initial recruitment to build a strong business that can last.

Image via Flickr by Glen Bledsoe