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Morphing from Good to Elite Franchise Brand

There are many potentially good franchise models in the market that require basic fine tuning to reach their optimum performance.  In addressing such needs many may surprisingly find themselves moving from a good franchising brand toward an elite franchising brand. 

Here we are not examining the brand that consumers recognise; rather it refers to how franchise investors perceive and enter into contracts with superior franchise brands.  Elite brands can potentially mature from any industry sector.

Of some import to being acknowledged as an elite brand is the market relative size of the advertising budget to attract customers but only to a point. But there is no relationship with the size of the budget to attract franchise investors and being a market sector leader does not support any assumption that a brand is elite.

To give somewhat of an insight as to the difference between good, bad and elite it may be helpful to consider how and why elite franchise brands perform.

Elite brands tend not to advertise for franchisee investors.  They have waiting lists. They have reputations for successful franchising that eliminate some of the needs of lesser franchise models.  Landlords would at least consider the removal of family and friends to attract them.  Lenders will crawl over broken glass to get to them. Suppliers get dizzy at the sight of a contract.

Their reputations tend to be based on financial success, high levels of compliance and strict selection criteria and processesDisharmony is consciously minimized through a rational approach built into the operating systems of the franchisor, including but not limited to, training, support and a brand culture created within reasonable levels of collaboration and carefully considered communication systems and styles.

A culture of strict compliance is a huge ingredient in elite franchising where franchisees actively participate to ensure collective compliance increases the value of everyone’s investment in the brand.  Such a driving force can never be understated and its importance can never be exaggerated.

How to achieve elite brand status tends to come down to, in part, the quality of mutually acceptable communication styles that include a succeed.  

Elite brands focus primarily on the growth of, and the return on, the franchisee investment.  Such franchisors are well aware that the heights of franchising benefits for all, including brand longevity, develop from a reputation for creating successful franchisees.

Honest and open two-way communication channels have to afford an acceptance by all that franchisors and franchisees must reach an accommodating balance between two often conflicting profit drivers; one being royalty from franchisee gross and the other being overall franchisee net profit
management.

In such systems there is a determination by all parties to negotiate in good faith to ensure that the health of the franchise culture is maintained.  Successful franchisees and franchisors are better positioned to invest back into the brand to produce consistency of standards, higher revenue, even greater profits and even greater consumer and franchise brand reputation for healthy network growth. Given time such results go on to create an elite brand.

Franchisors tied to the general grind of revenue raising, staffing, supplier negotiations, franchise sales, conflict management and perhaps training, support, marketing and ‘strategy’ development can get so far lost in such traditional activities as to miss the forest for the trees. 

All of that and more can be so much easier to manage when the bigger picture potential is considered possible and the necessary people and attitudes are aligned to target the creation of an elite franchising brand.  Working hard is no excuse for working dumb. Ultimately strategy does not make an elite brand but people do.  

The all important and initially challenging effort for the franchisor is in the development and maintenance of mutually practicable relationships but like all good things; it gets increasingly easier as the healthy culture adheres to the brand and more and more buy in.

Getting franchisees to embrace brand accountability
individually and collectively is an impossible task when presented by the wrong people and/or with the wrong message.  

The task of creating an elite brand is far less problematic when the core ingredients are catered for within the original franchise development strategy.  However the sad truth is that those who begin with best intentions by and large first begin to stray when early revenue and network growth is paramount.

There is great news for any system that believes it has a shot at the big time and even for those that don’t go on to quite make it.  Along the way to producing a recognized elite franchising brand the benefits begin to flow and what was produced by the system before the journey began quickly fade into past under-performance
history whether they actually achieve outright elite status or not. 

While those who target elite brand status and don’t quite make it can realistically expect to be in greater numbers than those that do succeed they can expect an enhanced franchising reputation and greater all round financial performance and, depending on the concept; achieve greater system life.  And all far exceeding what lesser franchise models can possibly achieve across virtually all franchise model ingredients. Franchisors must step outside franchising norms and above all else adopt;

  • focus on franchisee profitability and investment return
  • focus on the financial strength of the Franchisor
  • strict and deliberate selection criteria and processes
  • franchisor performance that clearly insists of itself that franchisees must succeed
  • franchisor performance that provides mutually beneficial, strong and equitable growth and concept development
  • recruitment and cultivation focus to establish people with vision and passion
  • reasonable and effective levels of collaboration
  • carefully considered, flexible set of collaborative communication systems
  • commitment to ensuring collective compliance
  • practice of delivering equitable dispute mechanisms
  • commitment to an effective independent franchisees association to create efficiency

The vision is of an investment worthy franchise system determined to operate at optimum performance for all, now and into the future, where all participants have good faith rights and obligations that are held by all to be commercially sacrosanct.

The journey begins with an honest analysis of existing status and people.  Only from such an assessment can needs be identified and the appropriate seeds to achieve greater status and performance be planted.

One of the problems faced by naïve franchisee investors and quality franchisors is that virtually every franchisor tends to promote their model and/or concept as ‘cream of the crop’ when that is so very far from the truth.  Rest assured; elite franchising quality does stand out.

When considering the selection of an elite brand the task is not overly complex once a prospective investor understands, with the services of effective expert franchising advisers, the difference that is elite franchising. 

Unfortunately the selection of an elite brand is made somewhat easy simply because there are comparatively few elite brands to choose from.  There could be so many more. Many franchisors don’t truly appreciate the potential and too many franchisors and franchise models are so corrupted as to be past or even worthy of saving.

Seemingly believed by many is that relatively short term wealth with conflict and hazard is a better investment than long term wealth within a growing network and significantly escalating franchise asset value as opposed to the likelihood of an eventual collapse for the opportunist franchisor.  

There is more than enough evidence to illustrate that many have gotten and are getting away with that type of franchising and with a sizeable payout. But many of them die a slow and eventually painful death.

History will show that supporters of such franchising did not now properly bring into calculations, amongst other hazards, the memory of the Internet and the power of social media.

Whether a brand has the potential to become an elite franchise brand becomes irrelevant when a franchisor denies the possibility and does not commit to the effort and the investment.  Would anyone argue that ultimately it is the franchisors that determine whether a brand is to be good, borderline, bad, disastrous, criminal or, elite?

Reaching for superior performance is not for those who would avoid the effort and lack the vision to get there.  This topic is not something that would be contemplated by those who enter the franchise industry with a deliberate design intended to acquire quick riches to the dire detriment of anyone who falls prey and/or gets in their way. 

Such operators view superior financial performance in terms more closely associated with the basic glutinous driver that has created every scam devised over the centuries and long before Charles Ponzi and Bernard Madoff.

This subject challenges franchisors who realistically consider they have a model that can get to the top and those who envision a greater financial performance future in relative peace with relatively low legal costs, high consumer approval and hopefully, enhanced personal reputation without public castigation or financial castration. 

A typically brief consideration of the effort and investment required routinely shuts down the idea of any restructuring where restructuring is necessary. Unbelievably true but that is the limit of decision making thought
processes from many unsophisticated franchisors.

One suggestion might be to carefully consider all aspects for and against. That would be an evaluation of comparative energy, cost and profit outcomes including the potential for such things as add-on legal costs and brand damage cost and the profit potential promised by network growth and longevity. 

There are franchisors that may not consider their operation as currently being the ideal of what constitutes the potential to morph but their question should be whether it is beyond salvage.  Oh the systems holding potential are definitely out there.  

But you have to look.  They are hidden amongst industry waste specifically a bi-product of industry controllers who chase growth in the numbers of operating franchise systems virtually scamming all other industry stakeholders with expedient franchising principles where quality is not a necessary ingredient and mounting legal costs become inherent.

There is only one common negative of concern with elite franchise brands.  Much of an industry muddles or destroys on the back of their reputations for the delivery of truly successful franchising and their raising of the bar.

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About Ray Borradale

Ray Borradale's picture

Public Profile

Over forty years experience in Small Business and more than twenty-five years in franchising operations as a franchisee and employed by three franchisors, mostly in operations.

I have dedicated more than ten years and over 15,000 hours in the pursuit of quality franchising and exposing franchisor abuse of franchisees while advocating for the introduction of franchise relationship Law and the levelling of the dispute processes between bigger business and small business.

Contact: rayborradale@yahoo.com.au

Area of Interest
Franchise Operations