Did you know that back in its infancy, Domino’s Pizza co-owner Jim Monaghan traded his 50% stake for a Volkswagen Beetle? If he’d held onto his share, the Domino’s Pizza brother could have netted almost half a billion dollars a few decades later when the franchise sold, not to mention the profit shares he could have earned in the interim.
This is an example of just how valuable a franchise brand can become. But to get a franchise business to this level you have to know how to grow it successfully.
Are you wondering how to grow your franchise business?
Growing a franchise is different from growing a regular business. If you don’t figure out the right formula around how to grow a franchise, you’ll struggle to attract new franchisees and build your brand.
Continue reading to find out some of the top methods for growing franchises.
1. Fine-Tune Your Business Model
Currently, there are over 750,000 franchises in the US. If you want to stand out from the crowd and attract new franchisees, you need to have a strong, streamlined business model.
Great business models usually start with a good idea, but they don’t stop there. A lot of fine-tuning goes into business models that can stand the test of time and grow profits, both for franchisors and franchisees.
Let’s take Domino’s as an example again. The two sibling founders started off by selling pizza. Focusing on pizza was a good start, but they took things one step further.
Instead of simply serving pizza, the Domino’s Pizza brothers zeroed in on pizza delivery, something that hadn’t really been done before. Through this, they invented the pizza box as we know it today, and pioneered pizza delivery.
Fast forward multiple decades and their delivery model is still going strong. So strong in fact, that it helped them become a top-performing franchise chain during the pandemic.
Besides this factor, they also scrapped their 47-year old pizza recipe in 2010 and overhauled their entire menu in response to critics. Along with upgrading their menu options, they also managed to keep prices below that of rivals like Pizza Hut, Little Ceasars, and Papp John’s.
All of these factors combined have helped Domino’s Pizza strengthen its business model and stay in the game.
If the franchise brand hadn’t innovated along the way, the chain might have been forced to shrink or close down long ago.
If you’re wondering how to grow your franchise business, then your business model is likely still quite young. This makes it even more important to innovate and tweak it to be as streamlined and effective as possible.
If franchisees can see that you have a strong business model that clearly provides value, they’ll be far more likely to commit than if your business model lacks substance.
2. Effectively Showcase Your Business Model
Besides refining your business model, you also need to effectively showcase it to potential franchisees.
To take the Domino’s Pizza example yet again, imagine if you were the owner of the first pizza brand with a delivery model. If you didn’t showcase what an effective business driver this was to franchisees, many would probably see it as a crazy way of selling pizza and lose interest in your franchise.
If franchisees can’t see the value in your business model, they’ll look elsewhere. Therefore, showcasing and explaining the power of your business model is a vital part of how to grow a franchise business.
3. Create Resources
Another integral step in how to grow your franchise business is to create resources for franchisees.
Franchise locations need to operate as part of a larger network. This can be confusing for new franchisees. However, having a pre-established brand umbrella and set of locations can also be very helpful for them.
The easiest way to ensure cohesion and successful franchise locations is to give new franchisees access to as many informational and collaboration resources as possible.
These could be things like guides, on-demand video resources, tips and tricks, case studies, etc.
Besides this, you should also create ways that franchisees can communicate and mentor one another. New franchisees can learn from older, more experienced franchisees. They can share ideas, challenges, and solutions.
If franchisees can communicate with one another, this can be motivating and inspiring, and help them feel connected and less isolated in their endeavors.
To get franchisees talking, you can organize conferences, events, or meetups. You can also create virtual spaces where franchisees can communicate and help one another.
4. School Franchisees
Besides providing franchisees with ways to network with each other you should also actively teach new franchisees how to operate their locations.
One of the attractions of buying into a franchise instead of starting an independent business is that franchisees can access a proven business model and skip some of the learning curves, uncertainties, and pitfalls of opening a business from scratch.
One of the secrets to growing franchises is to take on an instructional role. You don’t only have to “sell” your business model, but you also have to train franchisees in how to implement it successfully.
Some of the ways you can do this are by:
- Providing comprehensive training materials
- Holding boot camps and workshops
- Offering training both onsite and at headquarters
Besides initial training, you should also hold ongoing training at regular intervals. This helps ensure the continued success of your franchise locations.
If your existing franchisees achieve success, you will earn more profits. It will also ensure their longevity, which will build brand recognition and attract more new franchisees, helping you to further grow your franchise.
5. Start Local
If you’re wondering how to grow your franchise business, chances are your franchise is still relatively small.
If this is the case, the best strategy for growing a franchise is to start with your local market.
Instead of focusing further afield, work to grow your brand locally.
Starting local when growing franchises has a number of advantages. You probably are already familiar with your target market, and know what works well with the local consumer.
You can pass this knowledge onto new franchisees, helping them to achieve success. Once you’ve got a handle on how to grow your franchise locally, you can then expand into markets further afield.
If you encounter teething problems in these markets, you’ll still have a base of well-performing outlets to carry you through. This can give you the stability and resources to focus on how to effectively break into new markets.
6. Never Lose Sight of Good Customer Service
One of the secrets to “how does a franchise grow” is good customer service.
As a franchiser, it can be tempting to focus on attracting new franchisees rather than serving the customer.
However, if you don’t have happy customers, it doesn’t matter how many new franchisees you have knocking at the door. At the end of the day, customer satisfaction is the key ingredient that drives any successful franchise.
According to statistics, poor customer service is the number one frustration for 27% of consumers. It can also cause up to 91% of consumers to abandon your business without warning. A further 41% are likely to recommend others not to support your business if they experience bad customer service.
The lifetime value of a customer who promotes your brand is 600%-1,400% more than one who detracts from it.
The takeaway? Happy customers drive business and promote your brand on their own, while unhappy customers leave suddenly and warn others against your brand.
Some of the pivotal ways you can promote customer satisfaction (and grow your franchise in the process) include:
- Simplifying processes and reducing customer effort ie. implementing easy checkout/ordering processes
- Invest in a strong HR department
- Polling customers
- Maintaining consistency across offerings and locations
- Improving customer care channels
Besides these specific measures, you should also take steps to ensure that customer service and satisfaction is at the core of your brand values.
7. Offer Value to Franchisees
Another essential element in how to grow a franchise business is to offer value to franchisees. The more value you offer, the more attractive your franchise will be over a competitor’s.
After all, you’re probably asking new franchisees to invest thousands of dollars upfront. To get them to do this confidently you need to have something valuable to offer in return.
We have already included some of the basic steps, such as offering comprehensive and ongoing training, providing resources, creating a strong business model, and connecting franchisees.
Besides these steps, you should also look into your fee structure to make sure it is competitive and fairly priced, and outline to potential franchisees how you will assist them with things like technology and marketing.
You can also poll existing franchisees to find out what you could offer that would add value for them and move the needle on their success.
8. Implement the Right SEO Strategies
As a franchisor, you are responsible for all of the overarching marketing associated with your brand. This will grow your customer base and potentially attract new franchisees.
If you’re wondering how to promote a franchise, one of the most important places to start is with your SEO strategies. If customers can’t find your franchise locations on Google, you’ll miss out on business and revenue.
Thanks to their multi-location nature, franchises face some unique challenges when it comes to SEO. These include things like:
- Duplicate content on location pages
- Webpage cannibalization
- Poor local SEO
- Poor domain health
If you’re not sure where to start in how to promote your franchise business through SEO, the best thing to do is hire an SEO agency.
SEO can be complex, even for small websites. Franchise websites are even more involved, as they have multiple location pages that need to be locally optimized. Because franchise SEO is more intricate than general website SEO, it’s best to go with an SEO agency like Kelly WM that specializes in franchise SEO.
9. Don’t Forget About Web Design
If you’re wondering how to promote your franchise online, don’t forget about web design.
Good web design acts as a foundation for your SEO efforts. It’s also important for making sure that visitors stay on your page and find the information they need.
If your site is hard to navigate, slow to load, unclear, or even just unattractive, visitors can drop off like flies. And visitors who drop off your website will probably never make it into one of your locations.
If you want to keep your site updated, loading quickly, and free from issues, you might want to look into outsourcing your website management.
The more you grow your franchise, the more harmful things like website downtime can be. Opting for professional website management also frees up time—time that you can devote to learning how to grow your franchise business and building out your brand.
10. Make Sure That Franchisees Do Their Own Marketing
While you should carry out umbrella marketing and make sure that website SEO is up to scratch—this doesn’t mean that franchisees shouldn’t do their own local marketing.
They need to promote their local specials, figure out how to get local feet in the door, connect with the local audience, etc.
11. Strive for a Balance Between Thorough Branding and Franchisee Freedom
Our final tip for growing a franchise is to strike a balance between thorough branding and freedom for franchisees.
One of the reasons why franchises can be so successful is they offer customers a dependable experience. People love fast-food chains because they know what they are getting. They can rely on the food to taste and look the same, for the checkout process to be familiar, and the decor and menu to be largely similar.
While you need to achieve brand continuity across your outlets, you also need to give franchisees some room to flex their creative muscles and try out new things. Striking the perfect balance between these goals is a recipe for happy franchisees and happy customers.
Now You Know How to Grow Your Franchise Business!
Growing franchises requires a different approach than most other types of businesses. Instead of solely focusing on the customer, you also have to figure out how to attract new franchisees and support them so that they meet with success.
Now that you know some of the basics around how to grow your franchise business, the next step is to take action.
One of the best places to start is with your online presence. Is your SEO strategy up to scratch? If not, contact our team here at Kelly WM to set up a free consultation.