When I tell someone that my business law practice focuses on
franchising, I will at times get a blank stare. This is where I explain that
franchising is a concept where a person licenses out their brand and business
system to another person in order for that person to operate a similar business
under the same name. If I am still getting a deer-in-the-headlights look, I
will say, you know, like McDonald’s. Once the golden arches are mentioned
everyone understands.
However, I was recently reading an online article from
Entrepreneur Magazine about the top franchises[1].
The surprise I took away from this article was the fact that Subway outranked
McDonalds on the list of America
I don’t know the exact ingredients that Subway has combined in
order to make their franchise even more successful than the most well known
franchise in the world. If I were to guess, I would not bank it on the
popularity of Jared as a spokesperson, $5 footlongs, or the innovative and
newest sandwich. Instead, I would guess that, in some way, Subway’s franchisees
are making more money than McDonald’s franchisees.
Whenever I meet with a new startup franchisor, the number
one thing I like to emphasize is that a successful franchise brand is one in
which the franchisees are successful. There are other issues to consider for
success, but a franchise system in which the franchisees have the ability to
make money will grow. Successful franchisees will tell others about the
franchise and franchise sellers and brokers will feel comfortable pushing the
franchise brand over other brands.
Some other factors that go into the success of a franchise
business include: having a teachable system in place; providing the proper
amount of support to the franchisees; excellent training; creative branding;
and good marketing. All of these things will help the franchise system grow.
But when you really focus on these additional items, they all boil down to the
same goal: helping the franchisee turn a profit.
So the next time you want to brainstorm about
expanding your franchise business, first look to your system and see how you
can help your franchisees increase their profits. This will help you increase
the number of franchises in your system. Maybe one day your system will be even
more recognizable than the golden arches.
