Although franchising's largest and most popular brands represent the images most people hold about the industry, recent research revealed that franchising has been significantly influenced by the growing number of new concepts appearing in the past few years. One-fourth of those had 10 or fewer units.
During these turbulent times, it is important for franchisors to keep their focus on attracting candidates that are a good fit for their system. Current economic conditions are putting a strain on everyone's bottom line and many in the franchising industry face a growing number of competitors. The collision of those two forces, along with stricter lending requirements, means that every franchisor is looking for cost-effective ways to attract new franchisees.
Certainly, all franchisors want to find the ideal franchise candidate who is successful, ambitious, highly-financially liquid, carries a solid credit rating with years of success in the business world or embraces a second career. While this profile would fit the franchisee mold for every franchise, the question is: "How, as a franchisor in an unstable economic environment, does one attract quality, high-performing franchise prospects and investor groups?"
Developing a Strategic Plan
As the changing economic climate increases obstacles for the business community, it is important that franchisors develop and execute a strategic plan. Serving as a roadmap to where a franchise is heading over the next few years, how it is going to get there and how the franchisor knows when goals are achieved, a strategic plan supports several facets of a franchisor's efforts to attract quality franchisees. Even with economic pressures, franchisors who execute a sound strategic plan have a greater opportunity to expand their businesses.
While a strong strategic plan is one of the most important elements a business can develop, it should be more than just a plan on paper. Once it is adopted internally, it should become a way of thinking that is embedded in a company's culture.
As franchisors set out to grow with the right franchise candidates, a goal-based strategic plan can have the greatest impact on driving results. This comprehensive form of planning focuses on a franchisor's mission, sets goals and implements action plans to meet strategic objectives.
Before developing a plan, franchisors should perform a thorough assessment of their business including strengths and weaknesses, opportunities and threats (also called a SWOT analysis). With this firm understanding of their company, franchisors are better positioned to execute a growth plan aimed at attracting quality franchisees.
An internal survey of existing franchisees can also provide valuable information, as well as data that can be used to attract qualified franchisees. For example, a recent survey of Little Caesars franchisees revealed that 99 percent of those surveyed agree that the...