Reasons Why Franchising Has Succeeded For Almost 100 Years

By Kerry CroccoOctober 1, 2019

Any business owner must predict the future and prepare for it. Franchises have succeeded for several decades due to the strategies they have put in place. Political instabilities, fluctuations in the economy and other forms of erratic market behavior call for a sober analysis. Below are some of the reasons why franchises have experienced so much success over the years.

franchise success
Franchise Team

Proper Business Model

A proper model for the franchise is the structural secret to its success. The model simply describes how the chain of command and operation works. It’s mostly fostered in the relationship between the parent company and the franchises.

The business model that a company adapts depends on the intelligence and type of franchise that it practices. So, the models of beverage companies such as Pepsi and Coca-Cola are different from KFC or McDonald's. The fast-food franchises do not necessarily compete against each other directly: instead, KFC sells fried chicken and McDonald’s sells burgers.

Location and penetration

Franchises have a reputation for occupying prime locations that attract lots of customers. The franchisees research the best places to open the store and the franchisor offers advice on location selection. This allows the business to grow into a sustainable, profitable operation.

Also, franchises can penetrate through different business ecosystems. The idea is to find a large territory for the franchise to grow and open new stores. The ability to adapt to different geographical locations keeps franchises in business.

Consistency

Have you ever realized that Coca-Cola will taste the same in Tiffin, OH and Mumbai, India? And that a KFC chicken wing is still the same in Cleveland as it is in Nairobi? The consistency of taste and style is one of the factors that keep these franchises in business!

Franchises set up their stores to operate the same way and serve similar products all over the world. The stores have the same trademark, logo and decor. In the case of restaurants, the layout and staff uniform are consistent.

Uniformity in the quality of products and services offered at local franchises helps them stay relevant to their loyal customers across borders. The aficionados of these products can get their favorite taste anywhere in the world creating a comfortable and predictable brand experience.

Innovation

Staying afloat for decades means that a business must adapt to changes in the environment and technology. Innovations have to be made every step of the way to strike a balance between delivering the same tried and true offerings while always testing new products and keeping the winners in the mix.

To stay in the public eye overseas, some franchises have brought in local flavor to their menus. While this seems to conflict with the brand's consistency, it adds to the selection. For example, in the case of fast-food franchises, restaurants serve the country’s favorite dishes alongside their trademark dishes. The menu, therefore, welcomes innovations to add to the dishes offered in these restaurants.

Resilience

One of the reasons why McDonald’s and Subway have stood the test of time is due to their resiliency. Although it seems like the two franchises have always had an upward trajectory, they had to persevere challenges over time.

For example, after the press questioned the health value of their products and ingredients, McDonald's formed the GAC (the Global Advisory Council). Created in 2004, the assembly of international experts now provides independent guidance on the nutritional value of the company’s products.

Training and support

A franchise has to have franchisees who understand the values and principles of the parent company. It is in the best interest of the franchisor to train and support the franchisees in order to grow. The fact that the established franchise trains the upcoming startups gives it an edge over the conventional businesses which only learn through trial and error.

Basically, new investors have to employ a lot of methods to learn about managing and operating their businesses. Other business people have to hire expensive coaches or enroll in mentor-ship programs offered by successful people.

But, in the case of franchises, the new franchisee gets mandatory training from the franchise team to ensure they understand the values, principles and operating models. Again, the parent company offers to train the staff members about producing the goods or services. Such support sets up the franchise for success.

Resources
https://www.forbes.com/sites/panosmourdoukoutas/2013/10/04/5-things-that-make-a-franchise-successful/
http://www.aboutmcdonalds.com/mcd/csr/about/nutrition___wellbeing.html
http://www.mcspotlight.org/case/factsheet.html

About the Author - Kerry Crocco

Marketing Coordinator for Franchise Solutions and Franchise.com; conduct email marketing campaigns, web page management and trade show coordination. Mother of two, wife and Young Living Essential Oils representative.
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