Here Are Eight Reasons Why Franchises Are Successful

Many are going for the franchising route because it is easy to buy and start one. Potential franchisees may have doubts about franchising because of the risk associated with franchising. Or they won’t have enough capital to start it. And if you still have second thoughts about franchising, here’s why you should still pursue buying one. Learn more about why franchises are successful and how they are a worthy investment.

1. Nurturing Relationships with Franchisees

One foundation of a successful franchise is nurturing relationships with its franchisees. After all, their franchises are the reason for their growth. One way they foster relationships with franchisees is through constant training. After all, training allows franchisees to learn more about newer tech and updated trends in operating their businesses.

Another way that franchisors strengthen relationships with franchisees is through constant communication. Franchisors should encourage dialogue with their franchisees. This will help them understand each other. Plus, franchisees can voice their concerns about the business to improve it. Finally, this creates a system of support for franchisors and franchisees.

2. Choosing Strategic Locations

Most franchises are strict with location requirements. For example, a franchise may not allow one or two stores to be a few meters away from each other. Some franchise locations have a protected territory, allowing one franchise to cater to that market. Plus, location exclusivity matters in any franchise. But even if they face stiff competition, their unique value proposition makes them stand out. 

That’s why they become well-known to the community and are the go-to store or business for that product or service.

3. Staying Ahead of The Curve

Aside from branching out to different locations and reaching out to underserved communities, franchises innovate. That’s one reason why franchises are successful. They don’t want to lag behind the competition. And if you want to know how franchises stood out from the competition, here are examples of innovations:

Innovations of Successful Franchises

How do successful franchises continue to stay in business? Here are some innovations that franchises have made to last in the game.

• McDonald’s – outsourcing customer service to increase drive-thru orders and creating specialty coffee
• Taco Bell – they innovated through mobile locations and digitalization
• Arby’s – introduced new menu items that diversified their products
• Planet Fitness – established the “Judgment Free Zone” to encourage more people to come to the gym
• 7-11 – stood out from the competition by introducing self-serve sodas, selling gas, and going digital through mobile checkout

4. Establishing a Strong Brand

Successful franchises did not get famous overnight. They took years to build because they needed to prove that their business provided more value than others. It takes small steps like delivering excellent customer service or building the right team. But they don’t stop at that. They uphold their standards and improve on what they need to work on.

5. Encouraging Franchisees to Add New Units

Franchises love welcoming new franchisees to their network. And franchisors will likely approve new units to their current pool of franchisees. After all, they have established relationships with them already. Plus, they know their track record of running businesses. Once they see franchisees perform well and have the potential to grow, they will prefer to grow their business with them.

6. Obtaining Finance Assistance

Many potential franchisees opt for big-name franchises because of the recognition it brings. But another attractive reason why franchisees may go for them is due to the financial assistance they may provide when starting a franchise. Not all franchisors can help potential franchisees. However, they can direct franchisees to other financing options, such as banks and the Small Business Administration.

7. Developing and Maintaining a Stable Supply Chain System

Another reason why franchises are successful is because of their supply chain system. Supply chains can become complicated. And franchises know how crucial this system is. If franchises manage their supply chain properly, they can reduce costs, increase efficiency, and provide excellent customer service. In turn, franchisees can operate efficiently and smoothly and deliver quality service.

8. Marketing

Aside from building a brand from the bottom up, successful franchises use tried-and-tested marketing techniques to attract customers to their business. If franchises invest in marketing, they can help franchisees acquire more leads. Marketing can be tough for big brands or multi-unit franchises. However, franchise marketing agencies can ease the burden and help the business grow.

Final Thoughts

It takes years for franchises to be considered successful. This involves providing quality products and services. On top of that, they need to invest in materials and tech to achieve success. Let’s not forget finding the right fit will help the business grow, produce franchise ambassadors, and attract more talent to the franchise system. 

And that’s why many entrepreneurs prefer franchising to starting their own businesses. Franchises strive to build a business model that will entice more entrepreneurs to buy a franchise and become part of their network. In turn, franchises become successful with the collective effort of franchisees to expand their business to various markets.