Making Franchises More Efficient

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 volume.

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 brand.   

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 costs. 

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 efficiency:

•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 times.