What All Franchise Brands Can Learn From Food

Perhaps no other franchising sector is as competitive and battle-tested as food. Every year, we release our annual report on the top food franchises based on franchisee satisfaction. The brands in this report have maintained double-digit growth and high franchisee satisfaction through some of the toughest years in franchising history. Franchisors from all types of sectors can learn a lot from what these brands do (and don’t do) to be successful.

Be open to change, but change cautiously. One day we’re eating all salads, and the next we’re eating only steaks. The food sector is super competitive and heavily influenced by trends. Franchisors in the space must constantly research and develop new products to stay relevant, while at the same time, they must be careful not to hop on every bandwagon that rolls by. No matter your industry, you have to keep an eye on what’s going on with your competitors and your industry, but that doesn’t mean you need to immediately react. Good franchisors know when to change and when not to.

Prepare your franchisees. Because of the high start-up costs associated with the food business, there’s more risk involved for franchisees. There’s not a lot of room for trial and error and not a lot of room to fail. For this reason, food franchisors (and lenders) often require prospective franchisees to have more experience and liquid capital than other industries. The food franchisors who we interviewed for our report also said they’re being honest—sometimes brutally– early in the due diligence process so prospective franchisees know just what they’re getting into. This is good practice, whatever your product or service and whatever your investment level. Now is not the time to over-promise and over-sell just to grow your brand. You NEED to prepare your franchisees for both the best and worst case, because, in the past five years, we’ve seen that the worst case actually can happen.

Prepare yourself. Droughts, hurricanes, fuel shortages, the food sector pretty much deals with it all, and their franchisees face major price fluctuations because of it. You might be in an industry that’s not as vulnerable to national disasters and the rising price of commodities, but it’s still not a bad idea to prepare for the worst. Implement safeguards, document processes, and have a Plan B. If nothing else, you’ll be able to use your preparations as a competitive advantage when you’re selling franchises. But you’ll also sleep better at night knowing that if the Internet implodes and air travel shuts down for a year, you can still run your business.

Cut your costs. Because of the higher start-up costs associated with opening a restaurant, many food franchisors have been forced to take a close look at franchisee expenses and do everything they can to lower them to help franchisees become more profitable sooner. Many of the franchise leaders we spoke to for our report work tirelessly to make sure their franchisees are always getting the best deals and spending as little as possible. So should you. It doesn’t matter how low your investment level or start-up costs are – do everything you can to make them LOWER. In the current economic climate, franchisees don’t have a lot of time or money to play around with. You want them to be as successful as possible as early as possible. Is a particular piece of expensive equipment really necessary (or can they get it somewhere else cheaper)? Is a car wrap really necessary? Do franchisees really need that corporate-branded toilet paper? Whatever it is, make sure it’s essential.

Treat your franchisees like humans, not store numbers. This is something that’s taken the food sector a little longer to get to, but something that has a big effect on franchisee satisfaction, engagement, and financial success. I don’t care what you’re selling or doing and whether you have five franchisees or 5,000, you need to make them feel like they’re more than just a number. Approach everything you do with this in mind. “When we do our franchise operations visits, instead of it being an inspection with a checklist, we are more focused on business support,” said Steven Falciani, former senior vice president of franchise operations for Quaker Steak and Lube. “Our franchisees appreciate that. We want our partners to do well. If they don’t do well, we don’t do well.” Amen.

Franchise Business Review releases reports throughout the year recognizing the top franchises in various sectors, as well as an annual report of the top overall franchises. Learn more about our research and register now to start measuring franchisee satisfaction.