As a franchise, implementing franchise-wide solutions is
always going to be more cost effective for both the franchisor and
the franchisee than if each franchisee were doing them
individually. Leveraging your collective buying power and
centralising stock purchasing from one location will reduce your
costs and enable you to negotiate better deals based on sales
With many elements of a franchise business already managed by
head office, it begs the question what other elements of a
franchise business can be consolidated or streamlined to make it
more efficient and reduce overheads. After all the more you can
save in costs the more cost effective and ultimately more
profitable your franchise will be.
Merchant Services for example is an area that could be
collectively purchased enabling you to benefit from better rates
and being able to offer contactless payments will also
significantly reduce your costs.
Reporting helps franchisees and franchisors understand what is
happening within their businesses enabling them to react to
emerging trends as they happen which can then inevitably influence
their marketing strategy, identify growth areas and respond to
consumer behaviour, without having to invest in an expensive team
of analysts or bespoke software.
There are of course other areas that can be made more
efficient, payroll, time keeping systems, virtual answering
services and training are all franchise requirements that can be
centralised, all of which benefit the franchisee whilst at the same
time ensure that franchise owner has visibility and control of the
The right people for your franchise
One of the biggest expenditures to any business is
recruitment, it costs more to recruit and train new employees than
it does to retain existing ones. It is important to invest in the
right people for your franchise, keeping morale high and their work
environment friendly and comfortable can significantly reduce your
It’s good to talk
Communicate regularly with your franchisees and find out what
their needs are you may find that there are more areas that you can
consolidate and make more efficient which will ultimately reduce
the costs and increase profitability. Regular feedback from your
franchisees will also help you plan and identify new target markets
or services. For example McDonalds created the Drive Thru in 1975
based upon feedback from one franchise store in Fort Huachuca in
Sierra Vista, Arizona where military staff were not allowed to get
out of cars in their military uniforms.
Understanding the successes and indeed failures of your
franchisees will help you identify growth areas and improve your
long term business strategy.
Here are my 5 Simple Steps to improving
•Perform a review of your head office services – Find out what
other services your franchisees use and if you could consolidate
them into your head office and make cost savings.
•Invest in recruitment and training from the very beginning –
This will reduce your franchisees staff turnover and help your
franchisees keep their employees motivated.
•Management Information – This is essential to understanding
how each of your franchises are performing as well as enabling you
to plan for expansion and compare stores.
•Accept card payments – This will increase your cash flow,
give you access to more customers and by accepting contactless
payments you will also reduce your costs
•Gather regular feedback from your franchisees and customers –
This will help you identify new products and services, share best
practice and develop your long term business plan.
NetPay an independent merchant services provider for example
has developed a payments platform called Revolution which captures
information from acquiring banking platforms, terminal devices and
its online payments infrastructure which is translated and analysed
to give franchisees complete visibility and control of their
services. This online reporting system allows franchisees to view
transaction performance which encompasses a whole host of consumer
intelligence to assist in the overall management of a business.
Many franchise businesses go through cyclical trading highs
and lows, either during the day as in the case of fast food outlets
or throughout the year for other types of retailers. This
information allows you to track in store trends and can be used in
ways such as timing your borrowing, arranging the right amount of
staffing, and boosting your marketing efforts during quiet