Growing your franchise business boils down to a few key concepts. The most important is understanding what is working well and identifying sure-fire opportunities to grow.
You have three main paths to growth:
Grow the franchisee count
Grow the franchisee sales
Grow the revenue and profitability of the parent company
Plus, one crucial step: hire a consultant.
You want to focus on all three paths. Let’s dive into each one.
You clearly did many things right to onboard your current franchisees. Now, revisit the processes that sold them.
Often, the key to replicating that success lies in identifying the single most compelling factor that convinced franchisees to sign up. While franchisees may have joined for different reasons, there are usually a few core concepts or unique selling points that appealed to every one of them.
Finding your “X-factor” — what you do differently or some innovative marketing tactic you used to attract franchisees — is essential. Once you identify it, double down on it and leverage it to bring in more franchisees.
One of the best ways to boost your franchise system’s overall revenue is to have competent, qualified regional managers focused on growing sales within their territories.
If your franchise system isn’t yet large enough to support multiple regional managers, assign at least one franchisor manager to oversee a manageable number of franchisees nationwide. Their primary responsibility should be to grow revenue and profitability for each franchisee.
Why does this matter? Increased franchisee sales mean higher royalties for you, the franchisor. It also gives you the justification to charge higher monthly fees if you provide valuable support, and it serves as a strong marketing tool to attract new franchisees.
These managers can assist franchisees by running advertising campaigns, identifying inefficiencies, and improving local operations.
Many parent companies rely solely on franchise sign-up fees and royalties for revenue. While these are important, you can unlock additional income streams.
You should maintain ownership of some territories yourself. Beyond that, develop products and services that franchisees need to run their businesses efficiently.
Each new franchise expands the parent company’s brand presence. More stores mean more people visiting your website and calling your corporate number, which increases opportunities.
Think creatively — real estate is a lucrative area where franchisors like McDonald’s have excelled by owning the land their franchisees lease, creating steady income beyond royalties.
Additionally, build a suite of business tools and resources your franchisees can rely on. You don’t want to offer products or services outside your expertise, but providing valuable resources that save franchisees time and money makes your franchise more attractive and profitable.
You can include some products as part of the franchise deal and charge for others when appropriate, especially if you are providing something franchisees would otherwise have to pay a third party to obtain.
It’s tough to spot growth opportunities when you’re immersed in daily operations. A consultant can provide fresh perspective, identify low-hanging fruit, and bring proven marketing strategies to the table.
Leveraging external expertise helps you avoid tunnel vision, brings in new ideas, and can be surprisingly affordable.
If you want to take your franchise business to the next level, focusing on these strategies—and partnering with experienced consultants—can make all the difference.