RATCHETING FRANCHISE SYSTEM PERFORMANCE

A franchise system to flourish over the long-term will need to be grounded in the franchisor’s philosophy that support and guidance of franchisees is fundamental to success.

When committing to a franchise system, a new franchisee expects their success to parallel the best . With continued support and guidance they have every chance. But it is the quality of that guidance that counts.

Managing a franchise system presents new and unfamiliar challenges for those from a background in the management of ‘orthodox’ companies. In the drive for success the franchisor must cut a path through these challenges with confidence. By investing in the support of a specialist franchise consultancy the franchisor will acquire increased certainty around their initiatives, while avoiding potentially disastrous pitfalls.

Franchize Consultants (NZ) Ltd, an Auckland company founded in 1989, which has developed Level Best, a consultancy solution for the franchisor intent upon developing their success.

Return on the investment in the Level Best solution will be substantial, amplified by the number of franchisees in the system. Quick-wins, pitfall-avoidance and informed decisions on strategy, each will result in profitability gains for the entire franchise system in the short-term and long-term.

Demand for Level Best arises from two extremes: The franchisor at the top of their game, keen for ways to reinforce brand strength and eclipse competitive forces. And from the franchisor not progressing as well as liked.

Level Best reviews the franchise from four perspectives - revenue, cost-containment, process performance, and franchisor-franchisee relationships.

It uncovers profitability opportunities, and identifies barriers affecting progress.

The outcome is a clear picture of actionable opportunities.

An overview of the approach provides a glimpse of Level Best in action:

Sales Revenue – Many factors drive sales revenue. Proper research, internal and external is essential for identifying those with the highest revenue leverage, and for providing insight into customer perception of what counts for quality and appeal.

Cost Containment - The investigation into cost containment is about mapping processes from order intake, to value delivery, and payment. Value-adding activities and non value-adding activities are separated and become the basis for slashing costs, containing them, or leaving well alone. Costs linked closely to customer perceived value are scrutinised with care. At the other extreme are costs with no bearing on customer perceived value. Reducing these has a significant impact on profitability.

Process Performance – More fundamentally, Level Best will generate advice on structural modifications to organisational form which might be relevant to some mature franchise systems.

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