Seven steps to franchising success

The benefits of franchising are well-documented but success is far from guaranteed. So what does it take to forge a formidable franchise?

Seven steps to franchising success

Here at Diamond Logistics we are approaching the third anniversary of launching our franchise. We have had time to refine what we are doing and are now confident that we are setting up and supporting our franchises better than we have ever been.

Having analysed the way that we have refined our franchise model, I thought it would be worth sharing some of that insight with you. So whether you’re a potential franchisee or someone franchising their business for the first time, here are my top seven tips for increasing your chances of success and establishing your new franchise relationship on the strongest foundations.

1. Start with crystal clear vision

The first part of our recruitment, training and depot setup always centres on our core values; the ethics and mission of what we are trying to do. As a team we all sat down and updated our five-year plan this year. We absolutely nailed our mission, passion, niche, objectives, USPs and deliverables for the next five years and branded it Diamond 2020 Vision. We then published that on a poster, which now hangs on the wall of every one of our depots. Key messages are used in all of our communications and training so the messages are reinforced. This vision is at the heart of everything we do.

2. Put training at the heart of the business”

We have three days’ training in a local business centre, one day in the Guildford HQ and a one-day setup. All of the content is covered in a 700-page manual, which is updated quarterly and available on our franchise portal – the online resource for our network. We have all the training elements available as videos too, so you can refer back to them at any point. The more we train – our team, our franchises, ourselves – we improve performance and retention, making our forecasts and performance more predictable as a result.

3. Stay in touch

It can be lonely starting your own business and easy to go off track so make sure there are plenty of ways for franchisee and franchisor to get together. We pay franchisees six visits in their first six weeks to support their development – quarterly thereafter – and we have a 50-hour support desk for all enquiries in the interim. We have monthly ‘powwows’ with board members present on the call – they are basically open forum events where franchises get to raise the issue of the day. We have three national events per year with socials plus two Mastermind events for our top-performing franchises, which are aimed at keeping our franchisees’ general business skill set up to date.

If you are just flogging franchises, you’d take the initial franchisee fee and run. If you are invested in the long-term success of your franchise system, you’ll be all over your franchises to support their growth.

4. Monitor activity

Some people will buy a franchise and think that people will just walk in as a result of the franchisor’s brand being above the door. Whilst this may well be true if you’re a Costa Coffee or McDonald’s franchisee, it’s not the case for most franchises. We have found that monitoring sales activity helps us stay in front of future sales and create predictable revenue. So when we see an activity slump, we can jump on it and encourage remedial action to focus attention on those all-important front-end sales. It’s good for the franchise and good for our longer-term forecasts.

5. It’s good to feed back

Feedback and monitoring are essential to make sure all parties are satisfied and aware of not only their obligations but their needs too. We call our franchises weekly, have monthly call-ins, book calls with key directors and we encourage full and frank feedback. We don’t promise to be perfect – we listen and improve – and ask our franchisees to be just as open to constructive feedback.

6. Define key metrics

We give everyone a number – a numerical KPI – to work to so they easily know if they are achieving what they need to. For one of our franchises the key number would be the amount of new account applications per month. From that they would have a turnover target, which is a minimum £2k a month. At HQ, we have a whole KPI dashboard of Diamond numbers – from daily job counts to average creditors’ and debtors’ days. A number-based system makes it very easy to ensure everyone absolutely knows whether they are on target or under.

7. Keep it super simple

Wherever you can, you need to remove anything that’s superfluous – whether that’s words, processes or bureaucracy. If you simplify your message, products and processes, it will help keep your product and service quality consistent.”

Take McDonald’s – its burgers are simple and they taste the same globally. This should be the aim of your product and service delivery too. If you keep it simple, there’s a better chance of your standards being consistently replicated and maintained.”

Kate Lester
Kate Lester