Robin Auld, marketing director at ChipsAway, explains the importance of following a franchisor’s tried and tested system
Statistics show that the chances of success for a new franchise business compared to a ‘go it alone’ business start-up are substantially higher, which is why so many would-be business owners opt to follow the franchising route.
There are a number of reasons why franchises outperform other business formats to such a significant degree, but foremost is the fact that when you invest in a franchise you’re buying into an established business model with a proven track record. In fact, the basic philosophy behind franchising is to expand the original business by replicating the initial formula, building a network of like-minded businesses that all operate in exactly the same way and deliver exactly the same product or service under exactly the same brand.
The point is to benefit not only from a recognisable brand that already has traction in the marketplace, but also from the market knowledge, business experience and specific expertise of the franchisor. Therefore, whether or not you have a background in your chosen sector as a new franchisee, you can be trained and supported by those who do have that background to become successful in that business.
Franchisors occasionally say they are looking for ‘entrepreneurs’ to join their network, but mostly this is not the case. The entrepreneurship has been invested already in researching, testing and developing the initial successful business. The inevitable early problems will have been encountered and fixed, the brand reputation honed and built. What franchisors are really looking for, once their business is established, are ambitious, focused, hardworking people who understand the potential of the franchise and aspire to emulate other successful franchisees in the network by making money from a proven formula.
That’s not to say that initiative and great ideas are not valued in franchising. They are of course, but being a franchisee means being part of a larger entity and operating independently from that can damage not only your own chances of success, but may potentially have a harmful impact on the franchise owners in the rest of the network.
Customers report that they like dealing with franchised businesses for the same reasons as a typical national chain, because they know what they can expect - consistency of service wherever in the country (or in some cases the world) they travel to. An experience that differs from expectations can cause confusion at best and at worst dissatisfaction. An unhappy customer of a single franchisee can create a negative association with the brand, which in turn can undermine the reputation and image of the entire network.
At ChipsAway we pride ourselves on a network of around 300 highly motivated, professional franchisees who enjoy sharing experiences and ideas with us and with one another.
A dynamic organisation that is open to change and improvement is essential to continued success, but in the context of a franchise, evolving the business model is all about communication, cooperation and consensus. A maverick business owner doing his or her own thing is unlikely to reap the benefits of being a franchisee if the laid down franchise formula isn’t followed or the franchisor is not consulted before making changes.
Marketing is another area where it is important to follow the franchisor’s instructions and adhere to the set brand style. National marketing is designed to raise brand awareness and generate leads for franchisees across the network and as such is an essential part of the franchisor’s role that is key to the long-term success of franchisee and franchisor alike.
Although the individual franchisee is responsible for marketing his or her own business in the local area, national brand advertising will have served to build credibility for the business as a whole and reaches out cost-effectively to a much wider audience of potential customers.
No doubt, the franchisor will also have developed professional marketing materials, reflecting the national brand style, for use by the franchisee in his or her local advertising. This helps maintain consistency of message and links the individual franchisee firmly to the franchise brand. Franchisees being ‘creative’ with their advertising, instead of following the set brand style, lose the opportunity to capitalise on the (often considerable) investment in national advertising made on their behalf by the franchisor and, in short, are doing themselves no favours at all.
Last year ChipsAway’s investment in TV advertising, direct mail and Google AdWords was instrumental in helping to deliver over 180,000 leads for our franchisees. Many of these came directly to head office, but a significant proportion of enquiries result from customers seeing the advertising and then looking at a later date for their local branch or operator. If the look and feel of what they see locally is at odds with the national brand, this invariably results in a lack of confidence in the local business and the potential loss of custom.
In conclusion, the best reason to invest in a franchise is that it offers a much lower risk to those wishing to be their own boss and run their own business. The reason for this is that there is existing market penetration. The brand you buy into already exists and is known by customers, the business model has been proven to work again and again and you can expect support and advice from the start.
As your business grows and develops, you gain immeasurably from being part of a larger organisation, rather than facing the potential isolation and often larger capital investment involved in going it alone. You gain from economies of scale, shared costs such as marketing and other back office functions provided by the franchisor and the fellowship that comes from joining a network of highly motivated, business people who can share advice, problems and triumphs.
As the saying goes, if it ain’t broke, don’t fix it. In other words, if you’ve hit on a formula for success, follow it to the letter and you’ll be a successful franchisee.