Sustainable growth is key to the overall success for any brand. Without it, it’s difficult to keep the doors open and the ROI flowing.
For franchisors, there’s more than one way to do this.
Let’s explore three types of insights franchisors can rely on to spur growth for their brands.
Number 1: Customer Insights
When considering expansion, there are many factors franchisors have to consider, including cotenants, cannibalization, and competition. But one of the most important influencers of growth is a franchise’s customers.
While that may seem obvious, this is true whether your brand is working to acquire new customers or retain the ones you already have. To truly understand your customers, it’s important to dig into their behaviors, their beliefs, and their values. Once you’ve done that, it’s easier to see how they act as consumers and how that relates to your brand.
So, study your transaction and your loyalty data, combine it with your area’s demographic and psychographic makeup, then ask yourself:
- Who really visits your locations?
- Where else do they visit?
- Who visits the most frequently?
- What do they buy?
- How do they interact with your brand? Do they prefer shopping or dining in-house? Or do pickup, delivery, and curbside options appeal more?
These questions are just a starting point, but should set you down the right path for understanding your customers. You can also think about the types of experiences that would inspire you as a consumer to return to a store or restaurant, and the types of experiences that would make you hesitate to come back. Your customers likely interact with your brand the same way.
When you know what they like and value about their interactions with you, it sets you up to optimize your locations and your offerings in a way that keeps them coming back time and time again.
Number 2: Location Insights
Growth doesn’t always mean adding new locations – it can also mean improving or relocating existing ones. But to do this, you need to understand all the locations in your network.
Every time a lease comes up for renewal, it gives you the opportunity to evaluate a site. Is it performing up to snuff? If not, is it possible it’s in the wrong location?
Sometimes, a unit might have been in the perfect spot when it opened – the right trade area, the right customers, the right everything. But over time, markets, trade areas, and customers can change, and what was once perfect, might not be now. Relocating a struggling location to a better one is a possible way to grow from within.
While store-to-store relocations can be expensive, they can also be worthwhile for locations that have good operators and marketing, but poor performance.
Number 3: Franchisee (and Potential Franchisee) Insights
One of the quickest ways to build momentum and growth for your franchise is through multi-unit franchisees. But that’s often easier said than done!
The lowest hanging fruit for multi-unit franchisees are the single-unit operators already in your system. They already believe in the concept, they have experience with the brand, and they could be ready for new opportunities and markets.
The tougher nuts to crack are franchisees that already have multiple units outside of your brand. These could be franchisees looking to divest their assets in one category or diversify their interests across multiple categories. Often, the hardest challenge can simply be getting on their calendar.
But if you can manage that, you have the opportunity to demonstrate the value of your business to them and prove why you’re a good franchise to invest in. To do this, you have to know your own business inside and out. What makes you different? What makes you better? Be more than a salesperson – be an advocate for your brand and show potential multi-unit franchisees that you’re a professional who means business. (Of course, knowing your customers like the back of your hand and the markets where those customers are concentrated can give you a leg up in this conversation.)
The Bottom Line
Your job as a franchisor is to grow. And part of that job is to minimize the risk of opening a new location, or multiple locations, as much as possible. If you don’t feel good about it, your franchisee won’t feel good about it either.
Using insights from data and analytics to help you find the right people and the right opportunities at the right times will help your growth strategy run more smoothly.
Interested in learning more about a real-life example of franchisor growth? Check out Buxton’s recent webinar with Hungry Howie’s Director of Franchise Development.