Some people compare franchising to "taking an express train": franchisees have achieved rapid expansion at low cost through the management of franchisees' funds, outlets and brands; Investors, on the other hand, take the express train of franchisor's brand, technology and business model to realize their low-risk entrepreneurial dream.
A failed case.
However, the road of franchising is not entirely paved with flowers, and many franchising enterprises have suffered from "Waterloo" because of irregular development, operation and management. The rise and fall of an old shop in Hong Kong is an example.
From the late 1930s to the early 1970s, an old restaurant in Hong Kong was famous for its unique flavor. The boss decided to take this opportunity to open more branches. At the beginning, there were not many branches, and the head office controlled the branches better, and the restaurant became more and more famous.
However, the partners in the restaurant have limited funds and cannot expand rapidly. After consultation, they adopted the way of joining investment to expand. This famous restaurant soon blossomed everywhere in Hong Kong, because many investors wanted to profit from this brand.
However, the good times did not last long, but the restaurants they joined began to decline, and the branches they opened closed down one after another, which was regrettable. The reason for its decline lies in the headquarters itself. Because the franchisees are recruited indiscriminately, as long as there are funds, they will be recognized, and the quality of franchisees cannot be guaranteed; At the same time, the headquarters was not prepared enough for the emergence of a large number of franchise stores, and the management and support could not keep up, which led to a sharp drop in the product and service standards of each branch, and finally smashed the signboard.
Analyzing this case, we can easily find that franchisees have problems in formulating franchise expansion strategies, providing training support, selecting franchisees and controlling franchise outlets. Ignoring the value of the brand, or selling the signboard cheaply for immediate benefit, will only end in failure.
Risks that franchisees may face.
The biggest risk faced by franchisees in the future is the relationship with franchisees. The main problem lies in:
* The franchisee is eager for independence.
This is the biggest and most common problem in franchising. Usually franchisees will make some achievements and achieve certain success after joining for a period of time. After mastering the operation skills, they will ask to leave the franchise network and no longer pay the relevant fees to the franchisees to get more profits. This is especially true in franchising with few service or joining factors.
* Risk damaging the brand reputation.
When choosing franchisees, we should set and maintain high standards and implement them through scientific evaluation methods as far as possible. This is closely related to the brand reputation, because franchisees will face the crisis that the bad behavior of individual franchisees will affect the brand reputation just by blindly choosing franchisees or lowering the standards.
* The binding force is weakened.
Compared with branch companies, it is very difficult for franchisees to adopt any business strategy, because franchisees are independent in law and finance. Although franchisees must abide by a series of operating terms stipulated by franchisees, they have the right to operate in the way they think best.
:: Difficulties in coordinating other supply systems. For quality reasons, franchisees generally control the supply links of franchise chains and prohibit the use of other possible supply channels for products or services. If the franchisee refuses to abide by this rule, it will lead to contradictions between the two sides, and even the relationship will break down.
9 success factors
As a franchisee, what are the factors for the successful implementation and development of franchising? After extensive research on successful franchise cases, Ambopoya Consulting found that they had nine success factors:
Brand and know-how franchising is a form of intellectual property transactions, and enterprise trademarks and product brands are the ties that maintain franchisees and franchisees. As a franchisor, if you want to expand the franchise system, you undoubtedly need a well-known trademark. In addition, having proprietary technology that can be taught is also one of the essential elements of franchising.
Before the franchise store opens, the franchisee should be able to completely and accurately copy the detailed information of the franchisee's business model, including the technical methods and process management that can make the franchisee profitable. These practical knowledge is the crystallization of the franchisor's experience and the result of the practice of the model shop, which is called proprietary technology.
It is worth noting that a franchise scheme can only be successful if the operating conditions copied by each franchisee are the same as those of the model store. Therefore, one of the basic functions of the model shop is to verify whether the business model to be taught to the whole franchise system is feasible and to modify the areas that need improvement.
At the same time, model stores also play an important role in stable operation at different stages, such as being a training center for new franchisees and a laboratory for new management systems, new products and new services. Therefore, the more sample stores tested in different situations and the longer the time, the smaller the risk of franchisee failure.
The next step should be to consider how to prepare for joining the business. Although many franchising systems have been developed on the basis of regular franchising in headquarters for many years, franchising is different from other operating systems after all, and new adjustment requirements have been put forward in organizational structure, operating system, legal norms, document preparation and so on.
In the establishment of organizational structure, franchisees should consider undertaking the following basic functions: franchise system development function, procurement and supply function, commodity and service development function, training and guidance function, promotion function, information function, control function and so on.
Franchisees should prepare some necessary texts in advance before carrying out franchise business, including franchise contract, public documents provided to potential franchisees, franchise brochure, franchise operation manual (including quality management manual, relationship management manual, product management manual and process management manual), VI/CI design manual, franchisee construction manual, etc.
The establishment of franchise fee system is a very key issue, which will directly affect the smooth development of franchise. Because investors are usually very sensitive to fees, the fees are set too high, which may keep some potential high-quality franchisees out of the threshold. On the other hand, it may affect investors' failure to obtain expected profits, and affect the recruitment of franchisees and the development of the franchise system.
If the fee is too low, the franchisee's income will be damaged, and even the cost of the services provided will not be covered, which is not worth the loss. Franchisees often charge franchisees one or more of the following fees, including franchise fees, advertising fees (marketing funds), royalties, etc.
After joining the development strategy as the basic work, the next step is to consider how to join the business and open a shop strategy. Different franchisees may adopt different development strategies at different stages, or set up stores sporadically, or set up stores centrally by regional carpet bombing, in order to achieve different expected purposes.
In addition, the lessons of Hong Kong restaurants tell us that if franchisees go far beyond the management and supply of headquarters, they will not be able to get strong support and timely supply from headquarters. In this way, the franchisor will not only rush, but also seriously affect his brand reputation and the future development of franchising in this respect.
When franchisees recruit and carry out franchise business in a new area, publicity and promotion activities are the first link. Different from other business types, the promotion and dissemination of franchisees not only attract the attention of consumers, but also attract potential franchisees.
The ideal franchisee should be the neutralizer of the following two extremes: one is a person with clear business philosophy, strong initiative and few terms and conditions; At the other extreme is the concept of employees, who have nothing to do with themselves and have no basic enthusiasm for the only things within their purview.
Between these two extremes is: have a certain initiative, through their own experience and market knowledge, take responsibility in daily operations, but not damage the business model taught by franchisees. This is a rare ideal franchisee. Therefore, it is one of the things that all franchisees must determine in advance to determine the most suitable franchisee type and set the selection criteria.
Training, Guidance and Support Once you have completed the selection of franchisees, you should start to support and guide franchisees, that is, initial training, including training from business theory to practice and on-site guidance during the opening period. The training for franchisees should not only be the initial training before and during the opening, but also the training to modify and update the business model in order to meet the changing market demand in daily operation. We call it continuous training.
Franchisees should receive regular courses or guidance, which can enhance their daily business activities. These trainings cover many aspects: how to sell, how to treat customers, how to operate, how to work as a team and so on. Of course, it should also include follow-up training to better adapt to the management system or study the effect of introducing new products or services.
Although franchisees actively carry out training in their daily business activities to avoid problems, there will still be problems of one kind or another, or unexpected situations that hinder business activities. Therefore, when franchisees encounter problems, in addition to training, they should also provide knowledge and experience support to solve problems and help them avoid problems. This kind of support involves a wide range of contents. As can be seen from the content of support, franchisees should focus on areas that need improvement, such as marketing, advertising and communication, or how to have a good operation and interoperability system within the franchise network.
After franchisees monitor and combine their own trademarks, business methods and proprietary technologies into a set of proven and effective business models and authorize them to franchisees, don't think that everything is fine, just waiting to reap profits. In order to make franchise stores successful, a key element is to implement strict supervision and management of franchise stores. The control of the business network, such as the inspection of franchisees and the arrangement of mysterious customers, is not so much the obligation of franchisees as their rights. This will be of great significance to ensure the necessary level and perfection of the whole franchise system.
The importance of this right lies in that the franchisee can verify whether the franchisee has really mastered the business policy of the enterprise and operate according to the basic mJW China Finance and Economics Network taught by himself.
Operating terms avoid situations that affect the brand reputation in operation. Of course, we must not forget that franchisees have the obligation to monitor, which will help franchisees to operate seriously according to the requirements of the system, and can also find behaviors that do not operate according to regulations and solve problems in time.
Therefore, the purpose of monitoring is not so much to punish possible problems as to prevent them before they happen. At the same time, it is also a communication way between franchisees and franchisees. By seeking solutions, franchisees can put forward suggestions and opinions on all aspects related to franchisees' operation.
All successful franchisees have the same road to success, just like reading a book with the same secret of success; All failed franchisees fail for different reasons, but after careful analysis, one or more of the nine factors must have gone wrong. To join the franchise, you need to be fully prepared.
China Automobile Trading Platform hopes to help you.