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Understanding the reasons behind high performance in franchising

February 18, 2022

For too long, the focus has been on identifying the low performers and high performers in franchising, but we really need to be examining what is working for the high performing franchises. Maybe you already know what those factors are, but it’s that elusive ‘why’ that’s so important. Why are particular franchises performing well? The truth is, that the franchises that are performing well have similar characteristics and do similar things to improve their performance (and to better understand their performance).


Thanks to analytics and the insights you can gather from it, we are able to better understand why the high performing franchises are performing so well - and now that we do understand, we’re seeing some similarities among the high performing franchises. Some of the insights might be pretty straight-forward, but there are a lot of insights that can be gathered from this information, and thus applied to other franchises. 


The unsurprising reasons why

If we sat down and thought about why particular franchises are performing well, we might all come up with the same reasons. The common ‘why factors’ of high performance include:

  • Profitability
  • Strong use of brand
  • Employee / franchisee engagement
  • Learning and development
  • Innovation

Knowing these factors is important, but understanding why they contribute to high performance is crucial. Let’s take a better look at each factor.


Profitability

Of course, the profitability of a franchise is front of mind for franchisors. A franchise that isn’t making money, just can’t be successful. It’s common for franchisors to view profitability as the franchisees responsibility, but it's unwise not to view it as a shared responsibility. Franchisors that work with their network of franchisees and spend time understanding the ROI, earnings, spend, etc. are more likely to perform better. It’s important to closely review this information, paying close attention to red flags and why they may be occurring and acting on any issues quickly.


Strong use of brand

Any franchisor will tell you that a strong brand is important to performance. Your brand is everything and the better performing franchisors know this. These franchisors spend a lot of time developing tools to improve compliance over brand adherence and systems that improve their brand strategy. 


Employee / franchisee engagement

An often overlooked factor in high performance is employee engagement. The employees are essentially ground zero for your franchise. They’re representing your brand, serving your customers and managing the daily operations. Higher performing franchisors value employee engagement and believe that happy employees = happy life. All franchisors should evaluate their employee engagement levels and how they can improve engagement.


Learning and development

The world is constantly changing and it’s important for us to be able to change with it. Continuous learning and upskilling is one of the best ways to prepare for change. The high performing franchisors understand the importance of implementing engaging training programs that fortifies knowledge, improves understanding and helps develop skills. But learning and development isn’t just about preparing for change, it's about growth and innovation too. Focusing on developing engaging learning experiences will undoubtedly contribute to a franchise's performance.


Innovation

The killer ideas do get you ahead in this world. Innovations, big and small, can be the difference between success and failure. The most revered franchises paved the way with bespoke systems and a unique take on their industry. Without different ideas and innovations, the most successful franchises wouldn't be what they are today. 


Strong systems and processes are key

These ‘why factors’ tie back to one thing; systems and processes. Almost all high performing franchises have amazing systems and processes put in place. Not only to improve performance, but to better understand why they are performing so well. The systems they use come down to much more than just POS and rostering, the systems are a part of every inch of the franchise. 


The high performing franchisors have taken the time to implement strong systems and tools that factor in the entire business. These systems take care of communications, compliance, training and onboarding, employee engagement, auditing and so much more. But the most important thing that their systems do, is provide analytics that give real insights into why things are or aren’t working. This understanding of why things are working, allows for scalability, reduces monetary and time costs and allows you to do what you do best. Without strong systems in place, franchisors will never be able to be the best that they can be. 


What can you do now to improve your franchise

The best way to improve your franchise and understand why things are or aren’t working is to invest in the systems that can provide you with these real insights and help you improve your operations. There are systems out there that can help you with each of these common ‘why factors’ by focusing on franchisor and franchisee relationships, compliance, auditing, engaging employees, managing policies and procedures, and more.


Any system you look at, will need to have:

  1. Integration capabilities: Data lives in lots of weird and wonderful places, standalone systems are going to hold you back today and even more so in the future.
  2. Custom report builder: What matters to your franchise system is different to someone else, so it’s important that you can trim away the details you don’t need and focus on those which you do need.
  3. Deep native functionality: Whilst it’s great to push and pull data in and out of multiple systems, find a system which does more functions - at a high level - and it’ll cost you much less in license fees and messing around with data than having 10 standalone systems!
  4. Integrated financial reporting: It’s a no-brainer in many ways, but you cannot assess all of the operational factors without looking at the end output of those factors in the form of financial reporting.


For more information on Op Central and how it can help improve your franchise’s performance, visit opcentral.com.au/schedule-a-live-demo


Original story printed in The Franchise Review. Written by Renae Fogarty, Op Central's National Sales Manager


Panel Discussion

There will be a dedicated panel discussion on the topic of “Understanding the why of high performance in franchising” during the National Franchising Convention 2021. Panellists include:

  • Selina Bridge - CEO, KX Pilates
  • Ken Rosebery, Managing Director, The Cheesecake Shop
  • Amber Manning - CEO, Just Cuts
  • Heidi Miller - Senior Director of Marketing APAC, Hertz
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