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How to strengthen, protect and grow your franchise business

Posted: 03 Sep 2019
Estimated Read Time: in 17 minutes

Want to be that wise owner? Read on to find out about the four pillar approach

How to strengthen, protect and grow your franchise business

You are officially qualified to read this article if you either own an existing franchise or are convinced that owning a franchise is the best path forward for your personal and financial freedom.

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I was once you. At 35, I made a decision that changed my life: the decision to buy a franchise. I had a wonderful relationship with my franchisor and made plenty of money. Then, after 15 years of ownership, I made another big decision and sold my business. This is what happened during the in-between years.

Peaks and valleys

In the early days, there were many times when I wondered: “What if this doesn’t work?” and had my share of sleepless nights. Usually, the tough days were due to cash flow not being what I had counted on or a key employee giving insufficient notice - one time I had to learn to drive a bus over a weekend!

Staying motivated and engaged was by no means a given. The work was exceedingly challenging. When I discovered a thief in my ranks, I fantasized about selling and doing something else. Then I’d put my head down and trudge through the valleys until the outlook was bright again.

The work was also exceedingly rewarding. There were many months and years when the pride of ownership and the income and lifestyle it afforded led to feelings of joy, confidence and thoughts of: “Why would anyone not want to own and operate their own franchise?” Those exhilarating peaks can often sustain one’s drive and motivation for prolonged periods.

The epiphany

By the end of year four, with two challenging valleys under my belt, the question I kept asking myself was: “What’s missing from my business?” I realised the 2001 post 9/11 recession and the ensuing dot.com economic tumble were, to a large extent, things I could not control. But they got me thinking about what I could control.

It was during that time I came across the book Peaks and Valleys by Spencer Johnson. I read it voraciously. The general concept of the book is that in order to be successful long term, the wise business owner will learn to adapt their business in a way that smooths out the peaks and valleys of cycles and other challenges. Spencer purported that with the right planning, a wise business owner could continue to build and grow, even during market downturns.

I wanted to be that wise owner. I decided then that I would learn how to strengthen, protect and grow my business the best way I could. This new knowledge led me to start thinking and acting differently.

I would stay aligned with franchisor processes and programmes and strategically focus my business on four essential areas going forward. Those four areas gradually became the foundational pillars that guided and drove my business for my remaining tenure.

As the leader of your business, these aspects must become your number one priority.

The four pillar approach

Try visualising the four pillars this way: when you sign up to be a franchisee, you buy plans with detailed daily, weekly and monthly processes and a basic structure for a proven, successful enterprise.

Once your franchise is established, in order to ensure your continued success and maintain your passion as an owner, it’s imperative you fortify what you have built. The 4 Pillars Approach provides the framework and strategy you need by strengthening, protecting and growing your business in a methodical and streamlined way. No one pillar is more important than the other. They are built in tandem to create synergies and unexpected benefits to your business. As long as they are balanced, your business will thrive.

Pillar 1: Layers of loyalty: strengthen your business.

Building layers of loyalty is the pillar that adds long-term stability to a high performing franchise. All stakeholders contribute to the long-term sustainable growth and success of your franchise, including employees, clients, the local community and your franchisor.

Loyalty ensures market forces and competitors don’t have a lasting impact on your profitability and extends your reach and goodwill with negligible costs. It’s never too soon or too late to strengthen your business strategically by layering loyalty internally and externally.

I would not have been able to expand my business twice if it weren’t for the good relationships and loyalty I had built with my franchisor and the others who mattered most. These relationships are a significant component of your success and make being a franchisee more personally rewarding and enjoyable.

Pillar 2: Strategic leadership: protect your business.

Leading strategically is a fresh take on leadership, aligning practical leadership processes and methods with your time constraints and vision for your franchise. Categorising leadership as ‘planned’, ‘unplanned’ and ‘responsive’ opportunities and challenges, allows you to efficiently and effectively use your leadership capital and build your pillars to fit your values and goals in the local market.

I was one person with 50 employees, 500 families to serve and a child to raise. Being strategic about how I invested my leadership time and energy was imperative to my success and my sanity. I’m confident it will work for you, too.

Pillar 3: Money metrics: grow your business.

Knowing your money metrics is foundational for building and growing your franchise and increasing your annual income. More detailed than your basic company finances, money metrics include franchisor data, industry norms and measurements of your own performance history for comparing and then projecting into the future.

In its basic form, understanding your metrics means you know your key numbers and can predict with reasonable certainty how an increase in one expense or metric will add or detract from your bottom line and therefore how much money you will make in a given year.

For me, there was simply no substitute for incorporating metrics-based planning and performance measurements to achieve annual profit and revenue goals. Developing and maintaining a true competitive advantage are also part of this foundational pillar.

Pillar 4: Method management: focus your business.

Method management puts success directly within your control because it’s the ‘how to’ part of building the pillars.

Starting with an annual review and organisational accountability, method management gives you the framework and timeline to build loyalty and lead strategically using your money metrics as a baseline. Frankly, it’s the least sexy part of how franchisees become successful, but it’s perhaps the most important pillar because this is the cement that holds your business structure together.

By methodically and simultaneously building your pillars - layer by layer and year after year - your success and the income you make will be solely determined by you. Your franchisor will always play an important role in your success, but the 4 Pillars Approach will ensure that you make the most of your time, opportunity and talents.

The author

Christy Wilson Delk is a business professor at Rollins College in Winter Park, Florida and author of Adventures in Franchise Ownership.

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