,

brandEXPANSION Hot Press

Franchise & Business Opportunity News

Franchisors Must Maintain Smart Growth Rates, Not Too Fast, Not Too Slow

Written on May 12th, 2008 by Joseph in Franchising Developments.

Who doesn’t want to be a successful franchisor? But it takes a lot of planning and foresight to develop a hugely popular franchise chain. If you don’t follow an effective and systemized growth plan, you can never achieve any goal. So, to develop as a franchisor, the first thing you will need is a smart growth-planning. This planning should start way before you have placed your franchise business for sale ads. The moment the first franchisee buys a franchise from you; your smart growth plan will set in motion. The first step in this growth plan is to make sure what you want to achieve in the coming years.

You have to calculate what will be the value of your business say five years from now. Then subtract your present-day value from that and you have a figure of how much money you need to generate. Find out the expected revenue you can earn from a single unit through royalty and other fees. By dividing the amount you need to generate with this number, you will get a rough estimate on the number of franchises you are required to sell. Now that you have a figure in mind, you can develop your support system accordingly. Having a proper support system in place before putting forward your franchise business for sale offers is a prerequisite for smart growth. You should only take as many as people you can handle; otherwise, you will be left with failed or dissatisfied franchisees. That will show up in your UFOC and cast a shadow on your future dealings with prospective franchisees.

So, provide as much support as possible to your first batch of franchisees. Once they achieve grand success, others willing to buy a franchise from you will come under your wings automatically! The next important tool of smart growth is effective communication. Make sure you have all lines of communication open such as hotlines, regular visits and a dedicated website. Thirdly, review your franchise business from time to time. Some restrictions may become redundant while others have to be added (Like the new FTC guideline does away with the need for identifying each and every part of the computer system to be used). Sometimes, it’s better for healthy growth, if you slow down a bit. When you have reached quite a portion of your targeted growth, it’s a smart idea to slow down. Evaluate the system thoroughly once more, so that you can be better prepared for tomorrow. Also, review your marketing strategies and prune those that don’t bring any positive results. Thus, with the help of smart growth plan, you will expand in the most healthy way.

brandEXPANSION’s franchise development team can help you determine the right ways and rates of growth. Contact us for more information.