The Simplicity Advantage in Building a Thriving Franchise BusinessA business certainly does not need to be simple to be franchised—but it helps.
The following excerpt is from franchise expert Mark Siebert's bookThe Multiplier Model.Buy it now.
Let's start with a basic premise:Almost any businesscan be franchised. After all, there are franchised medical practices ranging from urgent care clinics to optical centers to dental practices.
Entrepreneurs havefranchised businessesas complex as the high-end restaurantRuth's Chris Steak Houseand hotel chains likeHyattandSheraton, which sometimes operate almost like small cities. Conversely, carpet-cleaning and lawn-care businesses likeChem-DryandSpring-Greenhave much simpler operations and lower startup costs.
So a business certainly does not need to be simple to be franchised—but it helps.
Replicate by keeping it simple
A fundamental premise behind the Multiplier Model is that your business must provide returns without yourdirect involvement. So as you begin replicating your Money Machine, you will need people other than you operating the new locations. And because chances are that those people are less qualified and less motivated than you are, simpler systems will alwaysbe easierto follow and will allow less room for improvisation.
Simplicity keeps your people options open
Amajor drawbackof more complex franchise models is that they shrink the target market of franchisees who could be recruited to run the business. Medical franchises, for example, need torecruit licensed healthcareprofessionals as franchisees or employees. High-end restaurants need restaurateurs with extensive experience to run the business profitably. Hotels, especially more extensive and more complex ones, must often be run bymanagement companiesrather than by owner/operators.
By contrast, thinkabout Subway. An average restaurant might be 1,200 square feet. It does not have any grills, deep fryers, or grease traps. It is a simple assembly line for making sandwiches to order and serving drinks. A Subway restaurant can literally go intojust about anystrip mall in the U.S.—and sometimes it seems as if they have, with some 22,000 U.S. locations (and a total of about 40,000 locations in more than 100 countries worldwide).
Related:Tips and Strategies for Using the Balance Sheet as Your Franchise Scorecard
Don't make it so hard to deliver quality
Aside from the issue of the franchisee selection process, the simpler the business model, the easier it is tocontrol quality. If a 20-foot sandwich prep line has 40 different ingredients in its drop-in dividers, then there are only so many things that can go wrong in thefood preparation process. And if the customer is watching every step of the way, presumably those issues can be resolved before they have a bad experience with the product.
Keep in mind that morecomplex restaurantslike McDonald's are among the most successful franchises in the world, and even more complex restaurants like Ruth's Chris are highly successful. But take, for example, traditional Greek restaurants with theirextensive menusthat run for many pages, and you see few players that have successfully franchised in that space.
Simplicity remains true beyond the restaurant industry
Outside the restaurant industry, you can see the same trends in many different markets, with franchised businesses dominating industries with simple business models:
- Janitorial-services businesses.BetweenServiceMaster Clean,Jan-Pro Cleaning & Disinfecting,Coverall,Vanguard Cleaning Systems,CleanNet USA,Anago Cleaning Systems,Stratus Building SolutionsandBuildingstars, there are more than 27,000 franchisees in this industry — and more join the market every year.
- Carpet-cleaning companies.Companies likeChem-Dry,Oxi Fresh,Stanley Steemer,milliCareandCOIThave sold thousands of franchises in this space.
- Lawn-care businesses.This is another simple business model dominating the market by franchising, with companies likeLawn Doctor,Spring-Green Lawn CareandWeed Manleading the way.
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Don't let simplicity scare you
It may sound counterintuitive, but you do not need a novel and/or complex product tobe successful. A simple product or service, like Subway's sandwich assembly (and Subway did not invent the sandwich), will help you expand your business bytraining franchiseesfrom various vocational fields and delivering consistent results. At the end of the day, it is about keeping your customers satisfied, and people tend to love the simple things in life.
Get started withThe Multiplier Model
Going from small business to successful startup to scalable growth takes more than good luck. It takes a system. Over the last 34 years, franchising consultant and growth expert Mark Siebert has been sought out by more than 70,000 executives looking to expand their companies. Out of those 70,000, only 5,000 had the right systems in place to go from successful to scalable. InThe Multiplier Model, Siebert discusses the factors that determine if an entrepreneur is ready to scale their venture — and the best ways to get started.Read more.
