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What Successful Franchises Have in Common

by Ed Teixeira

Successful franchise systems share common features. Learn what these features are.

There are common attributes that a successful franchise system has which are shared among these franchise systems.

  • Franchisees are profitable and earn an ROI commensurate with their investment,
  • The franchisor has strict guidelines and franchisee profile for selecting qualified franchise candidates and there are few, if any, departures from these guidelines.
  • The franchisor does an Item 19 Financial Performance Representation.
  • Franchisees have a forum for communicating their concerns to franchisor leadership. This doesnít require a formal organizational structure, but franchisees have unfettered access to franchisor staff that will listen to and respond to problems.
  • Franchisee training is state of the art and on-going. Franchisee training doesnít end after a new franchisee joins the system, but rather is a continuing process.
  • The franchisor will entertain, address and correct problems with the franchise program, when required. Rather than turning a deaf ear to system problems, the successful franchisor will listen and be responsive to areas that require change.
  • There is a dispute resolution process in place, that has the objective of resolving franchisor-franchisee disputes that could lead to litigation.
  • The franchisor enforces franchise system standards consistently. Franchisors that uphold system standards are sending a message to their franchisees that the brand and the consistency of the franchise operation are important.
  • Franchisor gathers, compiles and report franchisee financial performance highlights to the network. Itís important to have an understanding of the financial results of its franchisees and share these key statistics among franchisees.
  • The franchisor is willing to assist franchisees that may encounter a sudden problem or challenge. This may include deferring royalty fees and spreading out payments over a period of time.

Franchisors that demonstrate successful performance share certain traits, which are presented above. Franchisors should use these items as a system checklist to determine how their franchise compares to successful systems.

© 2015 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating Officer, FranchiseGrade.com. He is a former franchise executive and franchisee. He can be contacted at 631-246-5782 or at  franchiseknowhow@gmail.com



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