Opinions expressed by Contractor the contributors are theirs.
Combine the effects of a global pandemic with the uncertainties of a disintegrating supply chain and potential entrepreneurs have some good reason to consider franchise ownership opportunities.
And while the risks and challenges of owning a small business have never been more acute, the decision to go it alone or invest in an existing brand remains both reasonably complex and extremely personal. Complex, because there are strong arguments for one or the other choice. Personal, because the real secret sauce in franchise ownership may well be the willingness to subjugate some of that inner Lone Ranger within each of us in order to fully harness the power of the franchise network.
It is also a question at least as old as colonial America.
The genesis of franchising in America dates back to 1731, according to the International Franchise Association, when a Philadelphia publisher named Benjamin Franklin sent Thomas Whitmarsh to set up a satellite printing plant in South Carolina. They didn’t call the Charleston location a franchise, but the terms and conditions were no different from today’s franchise agreements. Almost 300 years later, in what could be one of the few positive consequences of Covid-19, the case for franchise ownership has become more compelling.
Related: 6 Low-Cost Franchise Areas To Explore If You’re New To Franchising
The inherent resilience of the franchise model has been widely validated and can act as a buffer against disruptions to global supply and distribution systems.
This is not to say that the franchise option was immune to the personal or economic implications of the virus. According to market research firm FRANdata, some 20,000 franchise stores closed in 2020, and food and entertainment alone lost around 940,000 jobs. Still, overall franchise employment through 2021 is expected to increase by 10%, and IFA and FRANdata project that the franchise will return to most pre-2019 levels by the end of the year.
For the right kind of person, the prospect of participating in an existing, resilient business model – and squeezing every bit of potential value out of that network – by taking that leap of faith in the small business economy becomes a little less daunting. .
From the days of Mr. Whitmarsh until today, high performing franchisees know that harnessing the benefits of the network is both an art and a science.
Relationships of trust always work both ways.
Think of a brand with a specific management philosophy and culture – the organization’s operating system – as open source software rather than a rigid set of hard-coded rules.
These systems balance the brand’s experience, recipes, and playbook – the immutable truths – with the understanding that head office can’t think it all.
Related: 3 Tips to Build Confidence and Boost Business Transformation
Instead, the operating system incorporates mechanisms to ensure that valuable ideas and store-level efficiencies are identified, rewarded, elevated quickly, and widely disseminated for the benefit of everyone in the network.
The network is its own source of energy.
Beyond marketing investment, brand recognition, purchasing power, training, centralized recruiting services or even access to more attractive rental terms, franchise ownership offers the power of community and real-time business information.
Related: How To Leverage Your Network To Build A Thriving Business During A Pandemic – Remotely, Of Course
As the pandemic raged throughout the summer of 2020, many brands faltered as they scrambled to access real-time financial information. Several major brands have been forced to wait for monthly royalty cycles before they have a real idea of the state of their franchisees.
On the other hand, several franchise brands have organized daily calls with franchisees to share support, resources and good practices in real time. The best franchises measure and categorize everything from labor costs to order fulfillment times and overall satisfaction. They do this as a method of identifying and sharing best practices, increasing performance across the network and, along the way, improving owner profit margins.
Mandates work, especially in relationships of trust.
And the best come with a skillful twist and based on an established pattern of balance and mutual interests.
Standardizing something like accounting software can fix a problem like store level revenue leakage. Alternatively, it can be presented as a life changing gift for the local owner, providing an intuitive performance dashboard and a huge time saver on repetitive, low value data entry. When a franchise determines that standardized accounting is a key brand skill, offering a new measure of value to the owner, the conversation about new software becomes a much more compelling proposition.
The magic always lies in the way the mandate is executed – again balancing the imperative need for quality and consistency, with the belief that innovation also occurs at the point of contact with the customer and that every node in the network is a trusted partner.