Does Your Franchise Pass the Test?

Does Your Franchise Pass the Test?

The better franchise companies share certain traits that set them apart from other franchises.

These traits enable the franchisor to build a successful franchise company by providing its franchisees the best opportunity for success.

Here are the traits that successful franchisees share.

1. Franchisee profitability relates favorably to the franchisee investment.

The franchise program provides the franchisees an opportunity for profitability that is commensurate with their initial investment. There is also a balance between the profitability of the franchisor and its franchisees.

2. The franchisor controls the franchise sales process and adheres to its franchisee profile.

The most successful franchise companies built their program by utilizing their in-house franchise development team. This doesn’t mean that franchise brokers don’t have a role to play, however, study the top franchisors and you’ll find they controlled the franchise sales process from beginning to end. In addition, the franchisor adheres to its standards when it comes to franchisee qualifications and aren’t afraid to say no.

3. Franchisees have open lines of communication to franchisor leadership.

Whether through a franchisee advisory committee or access to upper management, the franchisees can communicate problems, issues and suggestions to the franchisor.

4. The franchisor solicits input and feedback from the franchisees.

The franchisor includes its franchisees in decisions that impact franchisee operations. Changes in franchise operations, marketing or finance should include the franchisees.

5. New products and services are tested, evaluated and measured by franchisees before introduction.

New products, services or equipment are tested or piloted in sample franchisee locations before being rolled out to the entire network. This approach will lead to credible results that the franchise network will accept.

6. The franchisor measures franchisee financial results on a scheduled basis.

A number of franchisors fail to obtain financial reports from their franchisees on a regular basis. This lack of financial information prevents a franchisor from knowing which franchisees are profitable and which are not.

7. Upholds the standards of the franchise program.

The better franchisors uphold their franchise standards. They recognize that their franchisees deserve it and the customers are entitled to consistency. Franchisors that don’t protect the brand are not respected by their franchisees.

8. Invest in franchisee training and support.

Top notch franchisors have viable and effective training programs. Training and support does not end with start-up franchisee training but rather is an ongoing activity. When franchise operations identify weaknesses in the execution of best franchise practices the training component should implement programs to address these problems.

These are common traits that the better franchisors possess. It’s important for prospective franchisees to confirm that the franchise opportunities that they are interested in have these traits. For franchisors that strive to maintain or achieve high standards in their franchise program these traits are the recipe for success.

Posted with permission from Ed Teixeira.

© 2014 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at