What small franchisees can learn from big brands

For many business owners franchising presents an opportunity to elevate and grow their business and develop a national or even international footprint.

After growing your business from strength to strength setting up a franchise is often the next logical step. If you decide to enter the franchising sector you will face new challenges.

Here are seven tips on how to overcome these challenges and turn your business into a thriving franchise:

Choose the right franchising opportunity

When becoming a franchisor you will need to be stringent with your franchising selection. Your brand is based on your business’ performance and maintaining your good brand reputation is essential as your business grows.  You will therefore to look for franchisees that have the same values and work ethic. This will reduce business closures; demonstrating to investors that you have a stable and good business.


It is very important when entering a new challenge in business or life. Adopt a complete and proper end-to-end data management system that will help support your business. It’s important that you find accurate and proper data that will proactively identify problematic and underperforming outlets which could jeopardise your brand’s future.

Diversify income streams

Diversifying into different services within your business will assist in creating new streams of revenue. For example, a fuelling station can diversify by including a store shop and car wash to create alternative revenue. Diversification also helps to spread risk during tough economic times.

Investigate the different opportunities in the value chain that will give you the best value and quality for your business. This could reduce costs and improve margins for the franchisees, in addition to also becoming a further income stream for the franchisor.

Be more hands-on

Open and operate your own corporate stores. Running a corporate store enables you to experience the true challenges that your franchisees experience on a daily basis thus ensuring that the operating model stays relevant and effective.

A multiple store ownership model can assist with overcoming the obstacle of finding the right franchisee for your business. This can be one of the biggest challenges when expanding a franchise. In a multiple store model an existing franchisee is already known and culture fit and experience do not present obstacles.  The model also brings an operational saving to the franchisor as you can have a large franchise network while dealing with fewer franchisees.

Most importantly, always prioritise your competitor analysis and stay informed about the industry that you operate in.

*Henk Botha is Franchise Development Manager: Restaurants and Quick Service Restaurants at Absa.        

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