5 Secrets to Franchise Growth

The whole point of franchising is to take a proven product, service or experience and multiply it. Not only is finding a business that is successful enough to multiply difficult, but having the capacity and ability to grow the brand and develop new locations or territories is even harder. 1851 spoke with three franchise companies who are experiencing growth to learn the secrets to their success.

1. Selectivity in franchisee selection

“Our financial requirements are considerably higher than others in our category or investment level and our discovery process is exceedingly thorough in ensuring cultural and operational fit,” said Dave Wells, Senior Director of Franchising for Sport Clips*. “Bottom line is that well qualified franchisees run better operations and have the ability to scale quickly.”

2. Ensuring full satisfaction of current franchisees

“In 2017 almost half of our new territories were current franchisees growing in the system. The rest were referrals from current franchises or people who came across our advertisements,” said Tony Lamb, CEO of Kona Ice. “It is crucial for us to help our franchisees be successful business owners for our business to grow.”

3. Sign multi-unit franchisees from the beginning

“When we decided to start franchising, we made the decision to only sign multi-unit franchisees that would commit to opening a minimum of three stores,” said Clay Carson, VP of Franchise Development for Coolgreens. “The philosophy for the industry, and for our brand, has always been that the cost of doing business as a whole goes down as more units are built. The more a franchisee expands, the more beneficial it is for their business as well as the franchisor.”

4. Selectivity in real estate

“It may seem counterintuitive when discussing growth, but selectivity in real estate is critical in driving successful operations and minimizing store closures,” noted Wells. “Sure, we could open more stores if we lowered our standards in this area, but if the store underperforms, it would negatively impact that franchisees ability to continue to scale.”

5. Finding passionate franchisees

“Every franchise will have its mission statement, for us it is to be a partner in the community,” mentioned Lamb. “When I talk to potential franchisees I look for someone that is more interested in community involvement rather than strictly interested in ROI. My most profitable franchisees work in schools, community centers and other community events. If they are focused on community involvement, the ROI will come naturally.”