The Key to Success in Franchising Expansion

The Key to Success in Franchising Expansion

Have you ever wondered how two outlets with the same name can show different financial results when all the factors comprising them seem similar? How is it possible that an outlet in a specific area is forced to close and a few months later another one opens in the same area, offering similar types of products and achieves higher traphic and greater success?

As business consultants we are requested to analyze business indicators and economic trends on a daily bases. We need to stay informed of governmental changes and the repercussions on businesses and our associates. We are required to know every commercial area in our country and seek opportunities which may arise in order to match the right company to the right place. Our fields of study combined with our working experience makes us competent to ensure all the above.

We deal with entrepreneurs and investors who request from us to develop their companies or to propose a more efficient and effective placement of their investment. The responsibility is truly great especially if one considers the economic crisis which has come about in the last year and which no one can predict how long it will last.

The steps in developing a chain with the method of franchise expansion are simple and consistent. At first we analyze the business at stake. We analyze the competition. We evaluate where it is placed in terms of strategic pricing and target market. We seek the lowest possible start-up cost without however, hindering the quality and image of the business. We select the location where the first outlet will open and then we open it. Finally, we support it throughout either with direct or with indirect marketing activities.

Returning now to our initial question: how is it possible after carrying out similar steps and activities that one outlet closes while the other enjoys profound levels of profitability?

The answer to the above question is the key to success in franchising and is none other than the factor: Man. How many of us have a kiosk or a mini market close to home or work but still prefer to go to the furthest due to the person working there. How many times in our lives have we rejected an outlet or a restaurant due to the behavior or level of service of the staff working there? The human factor is a factor in the field of entrepreneurship in Greece, in which none of us can incorporate into a formula for success. There is no recipe or method that can predict the "marriage" between the human factor ‘man’ and the business which the investor is recommended to invest in.

For this reason, all potential investors should analyze for themselves the nature of the business which they are recommended to participate in in order to determine if it suits their personality and temperament. Each interested party should set as primary and inviolable criterion, not the amount of investment or the length of depreciation but rather the activity itself. It is imperative (as romantics would say) to love what you do, to put yourself in the in the place of the consumer. Would he/she enter such an outlet as a consumer? Does he/she believe in the products/ services offered? Even in the case that the investor himself does not work in the outlet but instead sees it merely as an investment, it is still imperative that he/she believes in the nature of products / services offered and then in their profitability.

When a business opens due to ‘love/passion’ in the activity itself, then we as business consultants, can make the business succeed with all the necessary and appropriate activities which we already know and implement.