Does Your Franchise Pass The Test?
by Ed Teixeira
The better franchise companies share certain traits
that set them apart from other franchises.
These traits enable the franchisor to build a successful franchise company by
providing its franchisees the best opportunity for success.
Here are the traits that successful franchisees share.
1. Franchisee profitability relates favorably to the franchisee
The franchise program provides the franchisees an opportunity for profitability
that is commensurate with their initial investment. There is also a balance
between the profitability of the franchisor and its franchisees.
2. The franchisor controls the franchise sales process and adheres to its
The most successful franchise companies built their program by utilizing their
in-house franchise development team. This doesnít mean that franchise brokers
donít have a role to play, however, study the top franchisors and youíll find
they controlled the franchise sales process from beginning to end. In addition,
the franchisor adheres to its standards when it comes to franchisee
qualifications and arenít afraid to say no.
3. Franchisees have open lines of communication to franchisor leadership.
Whether through a franchisee advisory committee or access to upper management
the franchisees can communicate problems, issues and suggestions to the
4. The franchisor solicits input and feedback from the franchisees.
The franchisor includes its franchisees in decisions that impact franchisee
operations. Changes in franchise operations, marketing or finance should include
5. New products and services are tested, evaluated and measured by
franchisees before introduction.
New products, services or equipment are tested or piloted in sample franchisee
locations before being rolled out to the entire network. This approach will lead
to credible results that the franchise network will accept.
6. The franchisor measures franchisee financial results on a scheduled
A number of franchisors fail to obtain financial reports from their franchisees
on a regular basis. This lack of financial information prevents a franchisor
from knowing which franchisees are profitable and which are not.
7. Upholds the standards of the franchise program.
The better franchisors uphold their franchise standards. They recognize that
their franchisees deserve it and the customers are entitled to consistency.
Franchisors that donít protect the brand are not respected by their franchisees.
8. Invest in franchisee training and support.
Top notch franchisors have viable and effective training programs. Training and
support does not end with start-up franchisee training but rather is an ongoing
activity. When franchise operations identify weaknesses in the execution of best
franchise practices the training component should implement programs to address
These are common traits that the better franchisors possess. Itís important for
prospective franchisees to confirm that the franchise opportunities that they
are interested in have these traits. For franchisors that strive to maintain or
achieve high standards in their franchise program these traits are the recipe
© 2014 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at firstname.lastname@example.org