Franchising has proven to be an incredibly successful business model, giving millions of Americans the ability to operate their own business.
There are currently more than 780,000 franchise establishments in the United States, providing more than 9 million jobs for people across the country. The franchising business continues to grow with a projection of $521 billion GDP in 2015, which would be an increase from $496 billion generated in 2014.
Franchises come in all shapes and sizes, from restaurants, lodging, automotive and retail products, to business and personal services.
So how are some of the top franchises successful? There is no one-size-fitsall philosophy. What works well for a particular franchise may not for another one in a different industry. But there are some traits many franchises share that establish a solid foundation and continue to keep brands successful and relevant over the years.
Franchises often have a blueprint for their franchisees to follow and programs to help in their development. At Golden Corral, we have many systems in place to try to ensure a new location will be successful from the moment it opens its doors. These include a detailed site selection process, training programs, recruiting tools and operation manuals. For more than 30 years, we also have used a personality profile assessment that draws a clear correlation between certain score levels and more successful hires and lower turnover rates. Many franchises have similar support systems in place to give their franchisees everything they need to be successful from the outset.
Every franchise should have a great core product or service that consistently drives business to their organization. The most successful franchises, however, know the best ways to respond to consumer interests and how to reinvent themselves over time. One of the franchisor’s greatest responsibilities is to keep the product fresh and desirable for their customers. This is where the company’s creativity and flexibility is tested. They can’t fall into the trap of thinking “we have never done that before” or “it’s too complicated” to sabotage fantastic new ideas before they even get off the ground. Implementing new ideas will not only drive additional business to your franchise but energize and motivate franchisees and employees throughout the system.
New concepts can be created through research and development, focus groups and partnerships with industry experts. They can also be found in constant observation of the market and the fundamental ability to recognize good ideas. Golden Corral has implemented new concepts through a number of outsidethe-box approaches over the years. The pot roast recipe we use was given to our executives by an owner of an independent restaurant in Nebraska.
Several years ago, our current CEO Lance Trenary passed by an Asian buffet in Indianapolis with a line out the door. He did a U-turn and saw people lined up with a strawberry on a stick to dip it in a chocolate fountain. He brought the concept to Golden Corral, and the “Chocolate Wonderfall” is now one of our signature offerings.
Just like keeping an eye out for good ideas, good franchisors will listen to their franchisees to get their feedback, suggestions and thoughts on what will improve business. There is the saying that “if two people in business agree on everything, one of them is unnecessary.”
Franchisees can challenge management, let them know what the customer is thinking and offer recommendations from their perspective. Franchisees can make companies better if leaders are willing to let them participate in key decisions.
While franchises need to develop new and fresh concepts over time, they also have to consistently update company infrastructure. In the restaurant industry, a tired and outdated facility is a competitive disadvantage. Golden Corral requires facility updates every seven years, and we often see a considerable increase in business after a remodel. Similarly, franchises in other industries often upgrade display rooms, equipment and products to increase efficiency and give an entirely new appearance and perception of the operation. These changes are seen by the consumer and help position the franchise as staying up to date in the changing marketplace.
Franchises work hard to incorporate all the methods listed above and more into their business to keep it successful. So what else to they have to do? Tell people about it. There are many businesses out there, and customers have increasingly more options to spend their dollars.
Franchises must effectively market their business and communicate directly to potential customers. They should tout their own success and tell people why they are the best. Advertising is a major factor in promoting the value of a franchise.There are a number of different methods franchises take to ensure their businesses thrive and grow. While their approaches may vary, many of the top franchises use the practices listed above to create a consistently successful brand.
Bob McDevitt is Senior Vice President of Franchise Development at Golden Corral, the nation’s largest grill-buffet chain. He has spent more than 40 years in marketing and operations with top restaurant brands such as Pizza Hut, Tony Roma’s, Arby’s and Golden Corral. McDevitt joined Golden Corral as Chief Marketing Officer in 1994, responsible for marketing, food and beverage, purchasing and distribution. In 2004, he was promoted to Senior Vice President of franchising, overseeing franchise operations, franchise sales and quality assurance. McDevitt is a Certified Franchise Executive (CFE) and currently serves on the International Franchise Association Board of Directors.
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