6 Steps to Franchise Your Business

Dan Rowe, founder and CEO of Fransmart and a member of Young Presidents’ Organization, is responsible for launching the franchise programs for restaurant brands like Five Guys Burgers and Fries, Qdoba Mexican Grill, Vapiano, zpizza, Freshii and Elevation Burger.


Entrepreneur magazine recently interviewed him for the article “How to Succeed in Franchising Your Business”. Below are Rowe’s six top criteria for a successful franchise business.

1. Great concept
A franchise cannot succeed without a concept that connects with consumers. I always tell franchises that systems and marketing are important, but there is nothing more important than that line out the door.

2. Strong Leadership Team
In order for a business to be scalable, the founders need to free themselves up to conduct high-level tasks and manage the brand’s growth. Executives need to relinquish control of day-to-day operations, and build a team of strong, capable individuals to handle those jobs. At Fransmart, we often help our emerging brands make key hires before opening up franchise units, like in the case of The Halal Guys, where we introduced a COO and two directors of operations and training with backgrounds from various high-profile chain restaurants.

3. Impressive sales numbers
Investors and franchisees are going to want to see the highest possible return on their investment, and the best way to gauge that is through a restaurant’s sales. The higher the sales per square foot of a unit, the more likely it will be to attract high quality individuals as partners.

4. Simplicity
The easier a store is to own and operate, the more likely it will make for a fool proof success when duplicated. I always advise brands to keep store footprints smaller, and not make menus overly complex.

5. Documented systems
A brand needs to outline step-by-step processes for potential franchisees, including guides for manager/employee training, real estate site selection, store signage and social media. Upholding brand standards across franchise locations ensures that each customer’s experience is consistent from store to store.

6. A+ real estate sites
A quality team dedicated to real estate site selection/evaluation in each franchise territory is essential. There is no such thing as paying a good price for a bad site. Brands should focus site selection around mass gathering areas like airports, train stations, malls and neighbourhoods with a large commercial and/or residential presence. A brand will learn pretty quickly whether or not a part of its system is out of whack. If you hire bad managers or pick bad sites, customers will tell you with low sales, and you will not make enough to continue expanding stores. The customer is the one who votes whether you grow or go out of business.

(The author of this article is Deborah Stoll from Young Presidents’ Organization (YPO).

This article was originally published by YPO’s Deal Network, a global business network that brings together nearly 7,000 chief executives for education and deal support/transacting.

(Image: Thinkstock)