The average person owns about six cars in their lifetime, according to SafeAuto. Some own more, and some people never own a car – but on average, you’re going to have multiple cars throughout your life.
Your first car was probably dramatic different from the car you drive today – some of that can be chalked up to improvements in technology; but a larger chunk of that can be attributed to changes in your individual lifestyle. Rarely is a teenager getting their first car concerned with side-impact airbags, whereas for new parents, all safety features are mandatory requirements.
Both our needs and wants change over time as our lifestyle changes. For businesses, requirements change over time – a company with five stores and an eye on expansion has a significantly different requirement is going to have different needs from the tools they use then an owner-operator. They will also have different needs then a matured franchise with hundreds or thousands of locations.
At ServiceBridge, we’ve had the opportunity to work with hundreds of companies that run this spectrum – from independent, single location companies that are looking to begin franchising, to fully established franchise networks with thousands of locations across the world.
While all of these companies are using our powerful franchise management software and field service tools, the way they use them – and more importantly, why they use these tools - changes greatly depending on the size and scale of the franchise in question.
First Franchisees – Up to 10 Units
There’s no shortage of articles, statistics, and studies that point to the same thing – many new businesses fail. Some sources put the number as high as 8 in 10 businesses failing within their first 18 months.
But staying afloat isn’t the goal, particularly when it comes to franchising – you want to grow. And for every franchise you see on Entrepreneur talking about explosive growth, there are many others who never got off of the ground.
The initial stage of building a franchise can prove incredibly difficult. The challenges of getting a franchise launched are well-documented. How can aspiring franchisors go from concept to locations that are driving revenue and helping them grow?
1. Recruiting Franchisees: One of the key draws to purchasing a franchise, rather then starting your own business, is that you are purchasing part of an established brand. When you’re a brand new franchise, recruiting new franchisees can be a difficult task – essentially, you’re asking someone to invest in an unproven concept.
Some franchisors starting out will take any investor, or simply award franchises to friends or family – but the wrong franchisees can easily stunt the growth of the brand. To attract high-quality franchisees who are in it for the long haul, you need to prove your concept can actually generate consistent cashflow.
The right field service and franchise reporting system provides entry-level franchisors with the data they need to close initial franchises. While you may not have a robust, multi-year data like an established franchisor; having not only revenue information but information on marketing channels, leads, estimate win rates, average job value, and more can be used to make the case to your first investors that your franchise is more then smoke and mirrors.
2. Building a Process: Often, the biggest challenge for an aspiring franchisor once they have franchisees is replicating the success of their initial location. They establish a new franchisee, only to find that the success of their concept could not be replicated – the new franchisee doesn’t have the same process, the same type of personality, the same level of service. Whatever the factor is, the franchisees don’t click the way the initial concept does.
The key to making franchisees successful at any level is finding the right people and providing them with high quality tools and training. Most successful franchises provide hands-on training of a week or more with the franchisor, and provide detailed documentation for franchisees to continue their learning with. Rooter-Man, the #1 rated plumbing franchise, is an ideal example of this: they provide franchisees with 11 comprehensive manuals that cover all aspects of operating their franchise.
11 manuals and months of training may be excessive in some cases, but more training is rarely detrimental. Field service management software can assist in implementing this process and workflow, by utilizing custom forms, workflow rules, and providing documentation on each job that can be reviewed and improved upon.
3. Establishing Your Brand: From a customer standpoint, one of the key draws of a franchise is consistency. If you walk into a McDonald’s – in Times Square or Topeka, Kansas – you know what to expect, and what your food will taste like.
For a brand-new franchise, this element proves an obstacle – it’s not an established brand yet. The original location may be established in it’s market, but new franchisees are essentially starting a brand-new business with little recognition in their market.
Most franchise software programs, including ServiceBridge, have some level of functionality designed to generate reviews from customers. Reviews are always valuable, but they are even more valuable when you’re just getting started. These initial reviews serve as proof that your brand is a serious operation to potential customers, and getting these reviews should be one of the top priorities for new franchisors.
Emerging – Established in Region, Growing to National (10-50 Units)
Emerging franchisors represent a large chunk of the franchise market – franchisors that have successfully added locations and have some proven success under their belt. A good portion of emerging franchisors are regional – having a strong presence in a certain geography, but have not reached a point for international expansion.
Emerging franchisors have overcome the initial challenges of establishing themselves, proving process and results – but they are faced with new challenges when it comes time to take that next step:
1. Ability to Scale: The solutions that work for 5 locations rarely work for 50 or 500. When choosing the software you use to grow your franchise, it’s important to keep scale in mind. You not only want the ability to onboard new franchisees quickly, but also need the ability to manage many franchisees from one interface.
Many franchise management programs, including ServiceBridge, are cloud-based – giving franchisors the ability to manage from anywhere, and easily add new users into their system. By having all locations connected to one cloud-based system, franchisors have full control of their franchise – enabling them to make smart decisions that help their network thrive.
2. Managing Financials: At this level of scale, franchisors are seeing a consistent stream of royalty income from their franchisees – and relying on this income to continue operations and further fuel their expansion. Having a robust system to calculate royalties ensures accurate payments, and makes the process transparent for both franchisors and franchisees.
ServiceBridge utilizes a Dynamic Royalty Engine that gives franchisors the ability to configure and fine-tune royalty payments between franchisee and franchisor – including custom rules and a review/dispute process. In addition, we work with advanced franchise financial reporting tools such as ProfitKeeper that allow for more detailed financial analysis.
By having full data collection in ServiceBridge, utilizing financial reporting tools, and implementing a smart accounting program such as QuickBooks for Franchise; franchisors can ensure strong cashflow and financial stability, even as they scale.
3. Fine Tuned Marketing: A key part of scaling upward is having the right marketing plan in place. But as a franchise scales, marketing can prove to be a massive challenge. It’s a difficult task to effective market a standalone field service business – and that challenge is only multiplied as more locations are added.
Fortunately for emerging franchisors, there is no shortage of actionable advice on franchise marketing, and plenty of companies who specialize in franchise marketing, including Scorpion and others. But performing these marketing activities is only one part of the equation – you have to tie it to results.
A key component of quality franchise software is the ability to track Marketing ROI – which is a feature included in ServiceBridge’s franchise management system. By tying marketing efforts to real world results, franchisors can invest in the channels that work, and fuel the growth of not only their franchise network, but increase royalty payments and attract new franchisees.
Established Brands with Nationwide Presence (50-150 Units)
Now we’ve reached the stage where you, as a consumer, are likely familiar with a certain franchise – brands that have a nationwide presence, covering most major markets. Brands that reach this stage of growth often see a slower rate of growth in terms of new franchisees, with stronger returns from franchisees. The goal is to both sustain current success, and continue the path of growth.
1. Strategic Decisions: When you’re making decisions for a small group, it’s typically a straightforward process – but when you’re dealing with dozens, even hundreds of people, decision making can be monumentally difficult. Not only is it hard to get all the right data from across the network – the decisions you make as a franchisor impact hundreds of people and their livelihoods. Decisions at this stage impact thousands of customers.
At ServiceBridge, our franchise reporting systems give franchisors full insight in every aspect of franchise operations from the parts used in the field to marketing ROI by region. Franchisors have the ability to splice data across locations, regions, even companies for franchisors that operate multiple brands – giving them the data needed to make smart decisions for growth. For even more insight, franchisors can tie their data to a Microsoft Power BI dashboard.
2. Building an Ecosystem: No business can survive using just one tool. In fact, the average franchise network uses 8-9 software programs to carry out their operations. But your franchise management software should, ideally, be the core ‘hub’ of your operations – a home base used by field operations, marketing, finance, and other departments.
To create that hub that powers your franchise, you need integration. At ServiceBridge, we employ a robust Public API that allows for integration with other web-based, API enabled apps – allowing franchisors to connect up data between all the programs they rely on, simplifying workflows and providing efficiency.
3. Account Changeover: For established networks, account changeover becomes a concern – franchisees looking to sell their piece of the business, cashing out on their investment. The franchisor may also buy back existing franchisees, or a master franchisee will buy out other territories of the business.
Franchisors at this scale need a process in place to manage the changing of accounts swiftly and without issue. In ServiceBridge, we give franchisors the capability to easily change account ownership or lock accounts, allowing them to facilitate these changes with ease and keep their franchise network running smoothly.
Top of the Mountain: 150+ Unit Franchises
Congratulations – you’ve made it! You’re king of the franchise mountain – franchisees in almost every market, covering the map and possibly the globe. The mission has been completed – turning your concept into a robust network with strong presence in every market and generating consistent royalties.
Of course, the work is never done. You might be at the top now, but staying there is it’s own battle. Your franchise must continue to execute while staying ahead of competitors that are looking to take your place at the top. And the right franchise software tools can help you do this:
1. Continuing to Innovate: One of the key mistakes for franchises that reach hundreds of franchisees is becoming stale. After all, the process got you this far – why change what’s been proven to work? Don’t fix what’s not broken, right?
The rapid rate of change for technology, combined with the intense competition of the franchising space, means that you have to keep innovating and improving to maintain your position as a leader. Even McDonald’s – the world’s most visible, established franchise – is constantly trying new menu items, renovating stores, introducing self-service kiosks, and looking for new experiences to offer their customers.
Mature field service franchises should take the same approach – continuing to test new products and services with their customers, and looking for ways technology can improve the customer experience as well as improving franchise efficiency. Within ServiceBridge, we take the same approach – releasing application updates every two weeks to keep our franchise customers on the cutting edge.
2. Minimizing Risk: A major concern for mature franchises is avoiding risk – unhappy franchisees, mistakes with customers, the wrong disclosures can send the entire network tumbling down. There’s no shortage of franchises that reached incredible heights, only to fall apart – Quizno’s is the most notable example, which collapsed due to disagreements with franchisees.
To succeed as a franchisor with a mature network, focus needs to be kept on keeping your franchisees successful, and keeping your end customers happy. For franchisees, investment in marketing, training, and continued support helps drive their success and keeps them within your network. For customers, transparency and quality service reduce complaints and help protect your brand’s reputation.
Accurate disclosures of revenue, expenses, and taxes are critically important for mature franchises to avoid legal liabilities. An often overlooked part of reducing legal liability is ensuring correct use of DBA for franchisees, which ServiceBridge allows franchisors to enforce through custom forms and branded templates.
Succeeding at Every Level
You can have a used, starter car Honda Civic, or a top of the line Mercedes SUV with all the safety and technology features you can ask for. Most of the upkeep tasks for your car and what you use it for don’t change dramatically.
You still have to put gas in the car. You still have to take it in for oil changes. You still drive it to pick up groceries. Both cars have to be insured. The basics workflow doesn’t change drastically between a Civic and a Mercedes. Both have four wheels. Both are used to go from A to B.
Franchises operate in much the same way. You could have a franchise with five franchisees, or five thousand – in either case, the franchisor is focused on similar goals. Both franchisors are trying to grow their business, keep their franchisees happy, create effective marketing plans.
But the specifics of these functions, and their relative importance, change over time – just like your car does. A college student is more concerned with cheap upkeep, where a professional with a family is focused on safety and style. That’s not to say a college student doesn’t want a stylish car, or a professional wants an expensive car – their priorities are simply different.
Franchise software can be viewed in the same lenses – the core function may not change, but the priorities of what you can accomplish with it change based on the stage of your franchise. At ServiceBridge, we work with franchises of all sizes to help them in each stage – from ten, to ten thousand, and beyond.
Franchises come in all sizes – from starting out with the first franchisee, to supporting a network of thousands. Franchise software can help franchisors at every stage – in different ways.