As a franchise consultant, I am asked on a weekly basis the simple but devilishly tricky question, “What is the best franchise?” I always give the same simple but ambiguous answer, “It depends.” My goal is not to be elusive. Instead, I want to communicate that not every franchise is right for every person.
With 20 years of business ownership experience, including nearly a decade in the franchise industry, I have developed a very robust methodology for evaluating franchise brands and determining those brands that I believe are the premier opportunities within their industry segments. The characteristics of my top choices vary dramatically on required investment, speed to cash flow, involvement level of the owner, number of employees and several other important characteristics.
But there is one common thread to all the top franchise opportunities – the structure of the franchisor. All the elite brands that I represent share 3 attributes that combine to create a massive opportunity for the franchise owners.
Strong, Experienced Senior Leadership
In my experience, this is the #1 factor that differentiates a great franchisor from a good franchisor. When you start to evaluate a franchise company, take a close look at the senior leadership team. How long have they been involved in franchising? How much experience do they have within this industry? The most experience this team has within franchising and within this industry, the more likely it is that the team will be able to successfully navigate the always changing competitive environment and lead the franchise into smooth waters.
As an example, consider the leadership team at Hand & Stone. In Item 2 of Hand & Stone’s disclosure document, there are 10 senior leadership team members detailed in the disclosure. Of this group, 9 of the 10 have at least 5 years of experience for Hand & Stone directly, and several them have even more experience in other aspects of franchising and other aspects of the day spa industry. That’s what you should be looking for in a team and is one of the reasons why Hand & Stone has nearly a 100% franchise success rate!
Deep Support Structure
The second key indicator that you are working with a great franchisor is the depth of the support structure. All franchise companies are going to present that they have “strong” support in place. How do you evaluate if that is true?
The first step is to identify what the franchisor offers in key areas where you are going to need assistance. From my experience, the key support areas of need are site selection, recruiting and hiring and manager, initial training and marketing support. These 4 items are critical path items to success in nearly all franchises and you want to understand, in detail, what the franchise company offers to aid your success in these crucial areas.
After you have investigated the support structure in conversations with the franchisor, you should turn to “validation” with the current franchise owners. By conducting either in-person visits or telephone conversations with current franchisees, you will be able to verify that the franchisor is providing the tools to succeed within the franchise system.
The finest example of a deep support organization is at Xponential Fitness. Xponential Fitness is the parent organization of 8 boutique fitness brands and has developed an amazing support structure that feeds the success of the franchise owners. Each of the brands within this family has its own brand president, real estate group, marketing experts, training team and operational support specialists. The fact that each brand has its own dedicated experts provides the ultimate support structure.
Holding Franchisees to a High Standard
The final key barometer that you are working with a world-class franchisor is how the franchisor upholds the franchise standard. This is truly one of the most difficult elements for a franchisor because they are working with scores of franchisors of independent franchise owners in hundreds of locations with the goal of presenting one, unified brand.
The best franchisors in the industry hold the line of franchisee performance. The best franchisors will make certain that the level of service within the franchise locations are upholding the quality benchmark of the system by secret shopping the locations. The best franchisors will have regular site visits by leadership team members to make certain that hours of operation, appearance of the location and performance standards are all being upheld.
A prime example of holding franchisees to a high standard is shown by Five Guys. Especially within a restaurant business, it is essential to maintain the highest quality control and ensure a consistent service level within each location. Five Guys is masterful at this by implementing a variety of systems that include secret shoppers, regular visits from the corporate support team and constant discussion among fellow franchise owners. This combination of factors ensures that each location builds the quality of the brand.
There are some franchisors that are simply stronger than others. I would enjoy a one on one conversation with you about specific examples of franchisors that I believe are exceptional. You can contact me by email or telephone to start that discussion.
Chris Cynkar – 412-877-2000 – firstname.lastname@example.org.