HOW TO BUILD A STRONG FRANCHISE

Whether you are a franchisor or a franchisee, there are several important considerations to take into account before entering into a franchise agreement, as Christian Salloum, founder and managing director of BrandPortunity Hospitality Consultancy, points out.

The ultimate goal of the hospitality industry is to provide customers with enjoyable and memorable experiences, whether it's dining out, relaxing at a luxury spa or having a blissful night's sleep. Attention to detail matters.

Build a strong brand

To retain customers and franchisees, your franchise needs strong, identifiable branding. A convincing brand contains many parts, including the company name, logo and a strapline. Creating a shop front with colors that are instantly recognizable is essential. For example, McDonald's is well known for its yellow arches. When you franchise your business, it is important that the overall look is unique and easy for franchisees to replicate. You might even want to consider an upgrade to make the branding more appealing.

Plan for franchising success

It's vital that you develop an intelligent business plan. Franchise success lies in the hands of the franchisee. The million-dollar question is: “Will the business work as a franchise in practice?” You will be making many critical decisions, so it's imperative to have a robust strategy in place. As part of your business plan, you need to ensure sufficient profit for your franchisees after deducting business costs, royalties and other typical franchise expenses. A business plan provides essential information to develop a watertight financial model.

Create a competitive advantage

Creating a competitive advantage will make your brand stand out. Consider each aspect of your franchise system: product offerings, service, the experience you will offer your audience and your key differentiators. By executing this phase successfully, the world is your oyster.

Duplicate what makes your business successful

Franchisees operate on behalf of the franchisor. To achieve success, the franchisor must consider all obstacles the franchisee might face and provide relevant management support and training. To realize the same success, the franchisee will replicate the parts of the business that make it successful. If you cannot replicate these elements, the franchisee must adapt to the market and consumer behavior by understanding needs and preferences.

Know the pros and cons of franchising

Less capital is required to establish a franchise network because the franchisee invests in opening an outlet and is responsible for managing staff and day-to-day operations. The franchisor retains control over the franchise while the franchisee maintains the business. The franchisor is obliged to provide the franchisee with operational training, support staff training, advertising and consistent development and improvement of the franchise systems to ensure profitability. Franchisees that are underperforming can be troublesome and time-consuming to deal with.

Be smart with advertising

There is no doubt that strategic advertising and marketing positively impact sales and growth. Potential franchisees can gauge the success and attractiveness of a franchise and see the significant advantage that franchise networks have over independent businesses.

Select the right franchisees

Franchisees are the lifeblood of any franchise system. A franchisee that lacks skills, commitment or capital could cause the franchise to fail and damage your overall reputation. Ensure that you choose your partners wisely and have well-designed procedures in place for successful franchisee recruitment.

Ensure all franchisees succeed

Steady, well-planned and considered growth equals profitability, as opposed to ambitious expansion, which can lead to franchisee failure. While establishing new franchisees is important, nurturing existing ones is essential.

Ensure franchisees are compliant

A franchisee is an owner of a business rather than an employee. A strong culture of compliance highlights the benefits you can provide, including experience, knowledge and investment to improve your business' value and growth potential. Ensure that adequate, consistent procedures are in place across the entire franchise. Consistency in customer service leads to customer trust and repeat business, attracting potential franchisees.

Set up open lines of communication

Good communication with franchisees helps to ensure compliance. Provide support for franchisees and obtain feedback to improve your franchise system steadily. Schedule several meetings and annual business reviews to highlight the positive impact of the brand in the market, and plan any required improvements and/ or enhancements of the product/service offering in a particular market.

Know your legal obligations

When developing a franchise system, you should consider applicable laws, particularly franchising code of conduct legislation. It's crucial to obtain detailed advice about how the laws affect the various aspects of your franchise. Consider the structure of your business and how you own the assets associated with your franchise. The franchise agreement and disclosure documents should be at the core of your legal considerations. brandportunity.com

Predicting the future course of the hotel industry is a difficult task. However, through close observation of market trends and disruptors, owners and operators can position their brands to stay ahead of these changes. Operational costs, labor shortages, availability of resources and supplies, inflation rates, brand competition and ongoing market fluctuations are some of the reasons why brand owners have adopted news strategies when it comes to franchising.

More interest in businesses with purpose

During and after the pandemic, there were a greater number of conversations on sustainability, and consumers became more aware and concerned about the environment, opting to support environmentally friendly businesses with a genuine interest in the planet. Today's consumers want to support organizations that exist for a greater purpose and hold strong brand values alongside a clear company mission.

Innovation to capture market shares

Even though innovation isn’t a new trend, the fact remains that if you don’t invest in innovation, you risk losing market share. Innovation of processes, redefinition of the customer journey, introduction of new technologies and so forth will help brand owners broaden their offerings and capture a bigger market share.

Watch out for market disruptors

Market disruptions occur when new companies or technologies innovate outside a particular industry and their actions significantly impact that market. Alternative lodgings, such as Airbnb, housetrip and Oyo, have influenced consumers’ attitude toward traditional hospitality. People are more