You're buying a franchise—congratulations! Franchise systems have guided thousands of men and women toward fulfilling and profitable work, and you can be one of them. Soon, you'll finish your training, take over or build a location, hire your staff and open a successful business. Your combination of hard work and a well-known brand name will be hard to beat.
Nevertheless, not all franchisees are created equal—in any business system, there are some who strive for success every day and others who are happy with the status quo. As you research your franchise opportunities, you'll speak with many of these franchisees: some of them go-getters, others more passive. While both types may be happy the way they are, only the go-getters are taking full advantage of their franchise system's potential.
While the criteria for great franchisees varies from one system to another, they have certain traits in common. Top-performing franchisees follow their systems diligently and lead by example. They give constructive criticism to help improve the system and, in time, become key figures in their franchise system's overall development. Some systems even use franchise locations for training new franchisees. In these cases, successful franchised units become training locations and earn their owners additional revenue.
Most franchise systems have formal means of recognizing top performers, whether it's through a 'president's club,' 'hall of fame,' or some other kind of reward program. These programs can also be a lot of fun—trips, cash and prizes are usually available for honoured franchisees. On top of all that, there's the admiration of your peers. Emulating the go-getters not only earns you higher profits, it also marks you as a 'go-to' person when advice is required. Who might you be advising? How about new franchisees trying to improve their businesses, or even franchisor representatives looking for ways to strengthen the system as a whole? As a top performer, your opinion will count.
All you must do to be a top franchisee is recognize your franchisor's 'benchmarks' for success, then exceed them. Doing so will distinguish an exceptional franchisee like you from everyone else.
Franchise sales revenue
In a traditional franchise system, royalties are paid to the franchisor as a percentage of overall revenue. This means the more money you make, the more money your franchisor makes. By increasing revenue on your own, you help the franchisor increase the sales average throughout the company. This makes the system more attractive to new franchisees, which helps your franchisor expand.
A good franchisor will recognize your high sales accomplishments and share your story with other franchisees. You'll quickly make news among your fellow owners, who will be encouraged to call you for questions and feedback.
Being a leader in your franchise system can be extra work, but it's worth it. Among other things, high sales can qualify you for roles on franchise advisory councils (FACs), where you can have the greatest impact on the success of your location—and your brand overall.
Not all franchisors view sales revenue as an indicator of success. This may be the case if your system has a flat royalty rate, e.g. you pay a flat rate of $1,000 per month in royalties, regardless of sales. In these systems, the franchisor is no longer interested in raising overall revenue—it doesn't benefit from the increase. Sales revenue will only be considered a measurement of success when it is win-win for both the franchisor and you.
Franchise supplier relationships
Consistent purchasing from the same, franchisor-authorized suppliers is crucial to maintaining the customer experience from one franchised location to the next. Can you imagine what would happen if a quick-service franchisor allowed each franchisee to purchase french fries from whomever he or she wished? The final product would vary widely and in time, customer expectations would, too.
Maintaining strong supplier relationships will often qualify your franchise for additional rewards from both the suppliers and your franchisor. You can improve these relationships by giving suppliers constructive feedback about the product being provided, promoting their products as much as you can and of course, paying your bills on time. Like franchisors, some suppliers will allocate contests for top sales of a product or even contribute marketing dollars to assist top selling locations. Your success benefits everyone.
