Franchise Operations
To achieve long-term success, franchise systems require operational excellence at all levels, from their stores to their supply chains. Other essential operational factors include franchisee support, recruitment, training, and retaining top talent. Find ideas, tips, and tools to enhance your franchise business operations.
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Franchising has flourished over the past two decades, adding tens of thousands of units and rising on a compound basis faster than most of the industries it operates in. Much of this growth was achieved by franchisee operators who began when they were in their thirties and forties. Today many of them are in their fifties and sixties and looking toward retirement.
- Darrell Johnson
- 5,198 Reads 4 Shares
Bashir Shams spent 28 years with one of franchising's giants. He built a successful company and a prosperous career with his multi-unit Burger King operation in Mississippi. So why would he walk away from that to team up with a relative newcomer to franchising? That's just what we asked him about his latest plans to ultimately open two dozen locations of ZIPS Dry Cleaners on the East Coast.
- Kerry Pipes
- 5,206 Reads 107 Shares
Multi-unit franchisees have tremendous potential to increase their current revenue and future growth simply by reducing customer service breakdowns and improving service recovery. I call this "found money" because these dollars come from existing customers.
- Jack Mackey
- 5,378 Reads 1,023 Shares
Your franchise plan should include a well-rounded checklist
Joining the world of franchising can be an exhilarating - and often frightening - process. It requires a tremendous amount of research mixed with a bit of intuition and gut feel. To do it properly requires the careful development of a plan of action. One of the best ways to plan for something significant is to create a checklist and make sure that you cover and review each step.
- Kerry Pipes
- 17,014 Reads 1 Shares
Ken Greene has a secret. When he gets ready to open a new Honest-1 Auto Care franchise unit in New York (34 now and counting), he knows how to save up to 60 percent on the cost of his equipment.
- Kerry Pipes
- 11,167 Reads 1 Shares
Edvin Rajauskas and Val Kirielius have come a long way to open their first Buffalo Wings & Rings franchise location - all the way from Lithuania to be exact. The two Lithuania natives formed a partnership that has them destined for the American dream. Just last month, the two opened their first Buffalo Wings & Rings restaurant in Springdale, Ohio. They are excited about their new franchise and say growth is on their minds.
- Kerry Pipes
- 5,024 Reads 75 Shares
So you got the franchising bug. You heeded the calling to go into business for yourself. But you decided you didn't want to go it alone and you've teamed up with an operating partner to launch the new unit. It's now time for a reality check. When you first identified a partner, the two of you seemed to really hit it off. Your personal and business interests and philosophies seemed to blend, your skill sets complemented each other, and your eagerness to "run your own business" was infectious.
- Kerry Pipes
- 29,940 Reads 2 Shares
The allure of franchising can be intoxicating. Many young people (fresh out of college or with very little business experience) see franchising as a logical shot at owning their own business. Franchising can also offer a fresh start following corporate downsizing. So long as the required financing can be worked out in advance and the franchise agreement approved, the next major step is operations. It's where the rubber meets the road.
- Kerry Pipes
- 21,775 Reads 1 Shares
So you got the franchising bug. You heeded the calling to go into business for yourself. But you decided you didn't want to go it alone and you've teamed up with an operating partner to launch the new unit. It's now time for a reality check. When you first identified a partner, the two of you seemed to really hit it off. Your personal and business interests and philosophies seemed to blend, your skill sets complemented each other, and your eagerness to "run your own business" was infectious.
Now, however, you are a few weeks or even months into the business and you're working long hours and spending a lot of time with each other. You're facing stress and important decisions like how to market the new unit, hire and train employees, manage supplies, and many other operational issues that must be efficiently overseen. It's these reasons that make it so important to create boundaries and job responsibilities – for you and your partner - and then stick to them. The level of success for your new franchise business depends on it.
- Kerry Pipes
- 29,943 Reads
Over the past few issues of the Multi-Unit Franchising Report we have highlighted a handful of franchisees and their efforts to keep better tabs on the income and expenses of their units. Such unit economics strategies have become central to many franchisee operations. As the old adage states, you can't manage what you don't measure.
- Multi-Unit Franchisee
- 3,672 Reads 62 Shares
There are many different ways to approach the day-to-day operations of a franchise unit. Some people prefer to have operational partners and divvy up responsibilities. This might make sense when you have two or three people who each possess different skill sets. Perhaps one is better with organization and accounting, another more adept at marketing and customer relations, and so forth. It can be a good management tool but it's not for everyone. Remember it means profits are divided among the partners. Besides, some entrepreneurs like to have their hands on all aspects of operations and maintain a more centralized control.
- Kerry Pipes
- 15,466 Reads 1 Shares
Businesses spend an average of $28.87 per hour for each employee, according to recent figures from the U.S. Department of Labor's Bureau of Labor Statistics. This figure includes salary plus benefits such as health insurance, vacation time, and workers' compensation. Overall, 69.7 percent ($20.13) goes toward salary and 30.3 percent ($8.74) to benefits, with 1.6 percent ($0.47) of that benefit percentage going to workers' comp.
- Kerry Pipes
- 8,463 Reads 253 Shares
Jim Sullivan is the CEO and founder of Sullivision.com, a company that designs and delivers operations and leadership training programs for companies and franchisees worldwide. Clients include The Walt Disney Company, McDonald's, Panera Bread, Regis Corp., Jiffy Lube, Wal-Mart, American Express, Applebee's, Domino's, Dunkin' Brands, and Coca-Cola. Three years ago Sullivan's company began researching the best practices of high-performing multi-unit leaders.
- Kerry Pipes
- 15,862 Reads 2 Shares
If the standing-room-only educational sessions weren't enough to inspire the multi-unit franchisees, the spirited address from NFL Hall of Famer Mike Ditka certainly was. It was all part of the 2010 Multi-Unit Franchising Conference held this past March in Las Vegas at the Mandalay Bay.
- Kerry Pipes
- 3,675 Reads 6 Shares
Brian Klaubert spent 19 years as an engineer before entering the franchising world. Not surprisingly, he had very little financial background for running a business. That's where his franchisor, Christian Brothers Automotive, stepped in.
- Multi-Unit Franchisee
- 3,849 Reads 29 Shares
The 9th Annual Multi-Unit Franchising Conference, sponsored by Multi-Unit Franchisee Magazine achieved its greatest success ever. Despite a down economy, conference attendance was up 30 percent over last year, featured more than 100 sponsors, and a sold-out exhibit hall. The conference was held at the Mandalay Bay in Las Vegas, March 24-26, where Mike Ditka, former Super Bowl-winning coach, was the keynote speaker.
- PRESS RELEASE
- 3,329 Reads 1 Shares
Franchising provides benefits for both seller and buyer. For franchisors, the primary benefit is the ability to use other people's money to expand the brand more rapidly than they could either on their own or through investors or lenders. The initial franchise fee and ongoing royalties they collect allow franchisors to build their brand without sacrificing control to outsiders or the pressure of repaying lenders.
- Franchising.com
- 10,809 Reads 2 Shares
The difficult consumer business environment has made the economics of new unit expansion more challenging. This makes "getting to yes" with bankers more difficult because the economics do not have as healthy a margin for error as they did in more robust times. As a consequence, capital access will continue to be the most constraining factor as we look at the next few years. Financing new units is relatively more challenging in general, and in this economy that is particularly true.
- Darrell Johnson
- 4,575 Reads 3 Shares
Gaining access to and securing capital is more important for franchisees today than ever. Every week we talk with multi-unit franchisees about how they are growing and the kind of financing it takes for them to achieve their goals and objectives. It's an important topic and sometimes we get some very candid responses.
- Multi-Unit Franchisee
- 8,636 Reads
Let's face it, if you are looking into franchising, there's a pretty good chance that one of the reasons is that you are in search of a "culture" or leadership style that is a better fit than your career has been providing you thus far. Maybe you're coming from a background of working for a heavy-handed boss or a system that rejected forward thinking. You're beginning to see that strong leadership and a good cultural fit are important for your personal and professional success. Many franchise brands can offer this.
When you begin searching for a franchise that might be a good fit for you, you will definitely want a sense of the system's culture and its leadership style. For example, when you begin dealing with the sales person, take careful note of their attitude, tone, and overall personality dynamic. Do they seem to really believe in the brand? Do they seem truly interested in telling you about the brand and determining if you would be a good fit? Chances are these "gatekeepers" are a reflection of the entire system.
- Kerry Pipes
- 20,766 Reads 4 Shares
Bret Hooppaw, Luihn Food Systems' director of operations, had an "Aha!" moment when his 19-year-old daughter said she'd applied online for a summer job. When he asked, "Why don't you just go over there and apply in person?" her response was, "Nobody does it that way anymore, Dad." That's when Hooppaw, who helps oversee 90 KFC and Taco Bell locations, realized instant communication technologies are second nature to the Millennial generation--those who make up most of today's frontline employees--who will be his managers 5 years from now and who will be the organization's leaders in the next 5 to 10 years. "I knew I had to find a way to meet them on their ground," he said.
- Mel Kleiman
- 5,025 Reads 8 Shares
Gaining access to and securing capital is more important for franchisees today than ever. Every week we talk with multi-unit franchisees about how they are growing and the kind of financing it takes for them to achieve their goals and objectives. It's an important topic and sometimes we get some very candid responses.
- Multi-Unit Franchisee
- 8,735 Reads
Franchising is the most popular system for growing a business in the United States today. According to every government survey, franchising has experienced explosive growth since the mid-70s and is expected to be the leading method of doing business in the new century.
In the United States, there are over 2,500 franchise systems. These systems have in excess of 534,000 franchise units, which represent 3.2% of the total businesses. This 3.2% of all businesses controls over 35% of all retail and service revenue in the U.S. economy.
- Bob Gappa
- 21,947 Reads 8 Shares
It seems there really is a silver lining in every cloud. And the recent economic downturn has deposited a little of that silver at the feet of some multi-unit franchisees who can tolerate risk and don't mind a little "remodeling" work. Today, opportunities abound to buy distressed franchise units from other troubled or bankrupt franchisees--often for pennies on the dollar. If they have the stomach, these "rescuers" can snatch up these units, turn them around, and watch the dollars flow in.
- Kerry Pipes
- 9,045 Reads 2 Shares
I just returned from the Multi-Unit Franchising Conference in Las Vegas and, compared with the other industry conferences I've addressed so far this year, it was a welcome breath of fresh air. At other industry group presentations this year, attendance numbers were off (one conference was even cancelled at a tremendous cost to the organizer) and the prevailing mood at all of them could best be characterized as an oppressive atmosphere of economic uncertainty and pessimistic forecasts. Not so with the Multi-Unit Franchising Conference group of movers and shakers.
- Mel Kleiman
- 4,670 Reads 5 Shares
Sam and Louie had been in business for about ten years, operating a chain of retail clothing stores. They were 50/50 owners in the corporation. When Sam approached us he had already been working for about 9 months to try to come up with a proposal which Louie would accept for dividing up their operations.
- Nicholas K. Niemann and Andrew Horowitz, CPhD
- 6,779 Reads
Gaining access to and securing capital is more important for franchisees today than ever. Every week we talk with multi-unit franchisees about how they are growing and the kind of financing it takes for them to achieve their goals and objectives. It's an important topic and sometimes we get some very candid responses.
- Multi-Unit Franchisee
- 8,586 Reads
2008 was a big year for restaurant franchises to refranchise many of their corporate-owned units, according to a recent report from food service consultants Technomic. Top brands such as Applebee's, Pizza Hut, and KFC converted stores to franchisee operations.
- Multi-Unit Franchisee
- 4,444 Reads 60 Shares
Franchising is a great business model and with so many concepts and brands out there to choose from, research and due diligence are a big part of your assignment.
Of course you'll receive a wealth of information from the franchisor detailing and outlining almost every facet of the system and operations, but there is one other area of research that you owe it to yourself to uncover (many franchises even require that you do this).
Once you've narrowed your franchise brand choice, you'll want to talk to some existing - and even former - franchisees about what it's really like out there in the trenches every day running the business. This is part of your due diligence and it's imperatively important.
- Kerry Pipes
- 40,220 Reads 9 Shares
Sam had developed and owned a successful retail operation during his business career. He also tried to be diligent by having what he thought was a sound estate plan executed before he died. He and his wife Sally felt they had everything taken care of. So when Sam died unexpectedly, Sally was dismayed to see the vehement dispute that developed between her two sons as to who would operate the company going forward. Apparently Sam had spoken to both of them about running the company if something happened to him, but he had failed to make this decision. Sally ultimately found her only choice to resolve the dispute was to just sell the business.
- Andrew D. Horowitz, CPhD, and Nicholas K. Niemann, Esq.
- 4,148 Reads 66 Shares
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