Franchise companies need to make sure they are taking the right steps to succeed in the current retail environment while laying the foundation for future growth.
But with a constantly changing retail landscape and shifting consumer preferences, it’s hard to determine what to focus on in order to grow your franchise and make it thrive in markets across the country.
This begs the question: what should I be doing to ensure that my franchise grows and establishes viability?
Five Steps to Growth
- Establish Corporate Leadership Through Market Knowledge: Franchisors and franchisees, from the industry’s most prolific to the single-shop outfit looking to launch its second location, understand their home market and their “backyard” better than anyone.
They know the customers they want to reach, and both can effectively operate within their respective “backyards.”
But, do they know they know the next town over? Or the next state over? How about the next time zone? The answers come with decreasing confidence.
In order to keep from getting picked off, franchisor leadership needs objective and quantifiable national data to take swift and decisive action with their growth.
And with this foundational knowledge to lead successful market expansion, strong franchisors can meaningfully manage the expectations of their franchisees and customers across the country.
- Know Perception From Market To Market: Most franchisors will agree that the perception of their brand is different from city to city and market to market, yet most have a thin grasp on this concept.
Numerically, a franchisor may know that they sell more sandwiches in Albuquerque than in Richmond – but why? Do those Virginia numbers equate to a middling performance metric compared to other offerings or do they have the most popular BLT on the east coast?
Without a way to compare the Virginia customer base to the New Mexico customer base in a region-to-region study, it’s impossible to know for certain.
Some of these answers can only come from getting the pulse of the customers in each market – OR – from knowing the franchisee.
Data can also drive this awareness as there are a number of data sets that will give the franchisor the insight necessary to better tailor offerings from menu items to region-specific marketing campaigns.
- Learn To Let Go: Whether a parent, a coach or a franchisor, there comes a time when the training wheels need to come off and you need to let go of the bike seat.
If you choose your franchisees wisely, and value their vision and ideas, place some faith in the franchisee and let them go with a well-vetted customized plan.
Given the obvious care and due diligence required to prove a competent business plan, open communication between franchisors and franchisees should allow for some creativity and market-specific expertise to flourish.
There needs to be a trust factor between corporate and franchisee leaders – and as the franchisee proves their success through measured growth, let out the leash a little when they come up with ideas for their specific markets.
- Let Data Drive Your Growth: One of the most frustrating realities will be knowing that your concept is ready for penetration into a particular market, but the customer base is not yet ready to support it or to support multiple locations.
The patience required between both franchisee and franchisor to establish multiple locations in a market requires a teamwork approach.
However, it needs to be applied through an understanding of customer growth and timing, and aggregated data projections – national data combined with individual store transaction data can help drive that insight.
- Keep Your Friends Close and Your Enemies Closer: With all of the trade publications and news announcements, along with the movement of executives in the industry, there is absolutely no explanation for a franchisor to get snuck up on by a competitor.
Franchisors need to know and utilize the foundational approach to information gathering: check your facts – then double-check and triple-check them.
There’s a diplomacy required in tactical validation of rumors, alliances and deals, and the savvy franchisor has his or her ear to the ground to know what’s going to happen before it happens.
In a crowded competitive environment, it’s more important than ever for franchises both large and small to have a keen understanding of their customers and a precise definition of their market position in order to stand out from the crowd.
Buxton gives franchisors the tools they need to truly define and locate their target audience while giving them the ability to make informed, data-driven decisions for site selection, marketing strategies and territory development. Learn more about the customer analytics process.