Category

Business Plans

Franchise Business Plan Ebook

By | Business Plans
Ultimate Guide to Franchise Business Plans

In today’s world, we have learned to expect the unexpected. As the franchising environment changes, now, more than ever, it is important to help franchisees with their business plans. This Ebook, co-written with Franchise Relations Strategist Greg Nathan, we explore:

  • A step-by-step approach to create business plans.
  • How to move away from reactive franchisee support.
  • How to integrate your most important KPIs.

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This eBook will equip you with everything that you need to get started with Franchise Business Plans.



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Franchise Business Plans and Other Artifacts

By | Business Plans, Franchise Relationships
Franchise Business Plans Artifacts

According to Franchising Thought Leader, Greg Nathan, “It doesn’t matter where business plans are held, as long as they are used and reviewed.” Unfortunately, business plans can sometimes live in isolation on an FBC’s hard drive or with a “set it and forget it” mentality of building it once, and never review it again. Integrating the business plans with other aspects of the franchise is a way to make them a “living document” that stays fresh and meaningful throughout the year. You can do this by connecting business plans to:

  • Scorecards
  • Field Audits
  • Self-Assessments

Keeping these pieces of the puzzle working together can make an integrated system to support your franchisees.

Scorecards

A franchisee scorecard is a limited set of about 15 key metrics defined by the franchisor. A business plan then selects a subset of these metrics for one of the following reasons:

  1. It is targeted for improvement for strategic reasons
  2. The franchisee that you are working with is weaker than others in the network.

Business plans expand on these metrics by adding more granular Key Results (KRs) that test the ideas, or hypothesis, you outline to drive up the main KR that the franchisee is targeting.

Metrics in the scorecard can also be a way to track business plan progress. For example, if you have a goal around check size, you can check those numbers together on the scorecard with the franchisee.

Field Audits

Imagine that you want to track the number of people who buy an energy bar with their coffee as a KR. Maybe you think that this will increase the average check size and you know that part of the strategy will be upselling.

You could track if the franchisee staff have done upselling training courses. But nothing beats observing ‘in the wild’ if the actions that they have been trained on are truly being performed. This is best done by listening to each transaction to see if suggestive selling techniques are used.

You can do this with a field audit performed by the Franchise Business Coach (FBC) or the district manager. That is someone external to the franchisee that comes into the unit and observes, marking things off a digital checklist. This helps evaluate if the franchisee is actually executing the strategy properly. Whether or not the strategy will work or not is still unknown, but you can at least measure the execution.  The final analysis is done during the postmortem.

Sometimes the KRs that you want to drive are related to your audit scores directly, such as increasing online review scores by improving unit cleanliness.

However, at times your audit questionnaire does not include any questions to evaluate if suggestive selling is applied.  If that is the case, and the need is common across all units, you can advocate improving the questionnaire by adding this new standard. This relates to the questionnaire continuous improvement process. It is a good practice to churn out old standards that never fail and add new ones, aligned with strategic initiatives.

Self-Assessments

In some cases, field audits are not a good complement to business plans. This happens in the following scenarios:

  • The problem is not widespread and really is localized to this individual franchisee.
  • You need to pay closer attention to this process, instead of just one or two spot checks during the period.

In these two cases, self-assessments are a better fit.  Sometimes these are designed as audits on the franchisee themselves, and some of them are simply asking front-line workers to record a number (such as the number of energy bars sold during the shift). By doing this, that number and goal remain top of mind and they can course-correct on the next shift.

Conclusion

Overall, the scorecard guides the key KR of the business plan. The business plan expands on that with a different set of KR representing theories to test. And you ensure you properly execute those theories/initiatives by doing audits or self-assessments.  During your postmortem, if you didn’t reach your goal, you’ll have a better idea if you need new theories or if you need to focus on buttoning up your execution.



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How Key Performance Indicators (KPIs) Work with Business Plans

By | Business Plans, Sample KPIs
Franchise KPIs and Business Plans

Business plans contain Key Results (KR).  A subset of these key KRs are the Key Performance Indicators (KPIs) used by the franchise to measure its performance. It may seem a bit like “alphabet soup”, but knowing these acronyms is key to growing your franchisee. Naturally, KRs and KPIs used by a franchisor are very tightly related to their vertical.

If you are looking at a restaurant business, they will be looking at food costs and labor costs as the key drivers for the business. Other verticals focus less on controllable costs, as they are not as impactful as simply increasing top-line sales. In environments such as commercial printing, for example, the focus shifts to KPIs which drive the sales team such as number of calls made, quotes submitted or quote conversion ratios.

Similar to the detailed discussion in FranchiseBlast’s Scorecard e-book, we can define KPIs that are always important to watch. There are normally 12-15 of them at most, to avoid flooding the franchisee with information.  What is different with business plans is that based on your focus areas, you may bring back a subset of these same indicators, but you’ll normally dive deeper in your weaknesses.

The business planning cycle gives you the opportunity to take a step back and observe an area where you want to focus. Your base KR will be around the KPI you’re already tracking in your scorecard, but you’ll develop ideas around this which will augment this KR with other KR which will measure the impact of Initiatives you will be doing.

Example KRs for Restaurants: Check Size

Restaurants typically look at average check size as a metric in the scorecards. Imagine you are building a Business Plan for a franchisee. You look at their scorecard and observe the average check size is their biggest weakness.

One KR would be to increase the average check size to the same level as the average franchisee.  That is a great idea, but it is not actionable if that number has not been moving in a while. So it is a good opportunity to think through some potential root issues. This is best done as a brainstorm together with the franchisee.

In this case, imagine that together you came up with the following ideas:

  1. Staff is not upselling enough, and they need training.
  2. A larger proportion of your morning customers pick up only a coffee and then leave.
  3. Your night staff offers too many discounts.
  4. You increase prices as recommended by the brand last year because a cheaper competitor set up shop next door.

After the brainstorm, you and the franchisee can pick one or two of these to tackle at the same time. So, your business plan could have the following KRs and Initiatives:

  • 100% of the staff redoes the upselling training course before the end of June
    • Related initiatives include: Setting up a training day, having 90% of the crew completing the training, etc.
  • An average of 10 people per day buy a locally-sourced energy bar before 11 am this quarter.
    • Related initiatives include: Stocking enough energy bars, ensuring every customer is offered one, and maybe the energy bars could be included in the above training on upselling, etc. (yes… one initiative can affect multiple KRs).
  • Increase the price of 10 of the 20 top-selling items by 3% before the end of July.
    • Related initiatives include: Review competitor prices to find the easiest price increase opportunities, change menu boards, etc.

As you can see, these key results are very specifically related to your theories about what you think you can do to drive up the average check size.

Measurement

You need to be sure you can easily measure these KR from the line of business application which generates them, as they will not be as convenient to access as the metrics from the scorecard.

A major advantage of this approach is that when you do your post-mortem at the end of the period, you can go back and see if you achieved your main objective –  Increased the average check size. At the same time, you can review each of your theories that you had outlined to drive that growth. The value of franchising is in the network effect. If you find something that works for one franchisee, it can also be applied to others in the system.

If you did the upselling training and no one is buying additional elements, then either you’re not executing properly or training was not the right idea.  In the next period, you’ll want to find new theories to try.

Last Word

Overall, KPIs and business planning are tightly integrated. Throughout the process, it is good to be a guide for your franchisee as they navigate business planning.



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Proactive Vs. Reactive: The Franchise Support Spectrum

By | Business Plans, Franchise Relationships
proactive and reactive

Franchise business plans accelerate performance so more and more brands are encouraging people to use them.  This is something that we all strive for, but first, let’s take a step back and talk about franchise support from the big picture.

In a franchise environment, the Franchise Business Consultant (FBC) is the bridge between the franchisor and the franchisee.  They have the toughest job in franchising, having to balance emotions with pure numbers, compliance with coaching, and more.

If you think of their interactions with the franchisees on a spectrum from reactive to proactive, the franchise business plan is the most proactive element of their job.

Most Reactive to Most Proactive

The following list outlines the most reactive to the most proactive activities that can happen in the course of supporting your franchisees.

proactive reactive spectrum

Acting as a front-line employee

FBCs are often team players, and when they see a unit that is busy or otherwise needs help they just jump in and help, such as making sandwiches with the hourly staff. This sends a down-to-earth helpful signal, after all ‘no one is too tall to pick up the luggage.’

The downside of this approach is that it is highly reactive. The FBC is not utilizing their skillset, and not offering their true value to the unit.

Responding to problems

Getting calls, emails, and texts about problems can be a big part of the FBC role. While it provides excellent support, it does little to better the circumstance of franchisees. A business is like a project, and if you are not helping franchisees move forward, they will start moving backward.

Performing field audits to ensure compliance

Compliance-oriented audits are a core part of the FBC’s role. Walking around and finding problems to fix is important for a range of reasons, from health and safety to brand consistency. At the same time, this is reacting to what is not happening, and ultimately it is looking to past behavior, rather than on future actions.

Training staff and franchisee on compliance

Training staff on compliance and brand consistency, which is the baseline is something that is focused on future behavior. This activity is definitely moving towards proactivity and we know that it is the hundreds of little things that make support outstanding.  At the same time, training on the minutia of operations doesn’t give the franchisee the opportunity to look at the forest for the trees, like environmental or competitive changes, for example, which could be of great importance to their survival.

Reviewing the scorecard and coaching to improve performance

Taking a step back and reviewing KPIs, strengths, weaknesses, and coaching to bridge the gaps is one of the most proactive things that you can do as a franchise coach. On a scorecard, there will be leading indicators and lagging indicators, and a combination of both will help your franchisees.

Business planning

Putting a process in place to define the right goals and execute towards them is future-focused, so it tops our list of proactive franchise support activities. Business planning is working on the business, instead of in the business.

Balancing Act

FBCs, like the rest of us in business, can get”too busy mopping the floor to turn off the faucet.” Although the role will likely never be 100% proactive, balancing proactive and reactive activities is a great first step.



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Franchise Business Planning and Strategy

By | Business Plans
Business Planning and Strategy

We hear the words “strategy” and “planning” together all of the time. But, the truth in many franchise organizations is that the franchise business planning process, on the franchisee level, stands on its own, rather than being part of a larger whole. But having a plan isolated in its own silo will not help the company since business planning is part of a larger ecosystem. You can see elements of that system in the graphic below.

business planning and strategy

Vision

A vision statement is a declaration of where the company wants to go and is intended to be a guide for the company’s decision-making. Vision statements tend not to shift much over the life of the business. They are the “where” of strategic planning. According to the Corporate Finance Institute, Vision Statements should have the following characteristics:

  • Forward-looking
  • Motivating and inspirational
  • Reflective of a company’s culture and core values
  • Aimed at bringing benefits and improvements to the organization in the future
  • Defines a company’s reason for existence and where it is heading

The Vision Statement should then be connected to the objectives set in the franchise business planning process. Objectives will change from quarter to quarter and year to year, but the Vision will be consistent.

Core Values

Core values are the fundamental beliefs of the organization. They are the “why” of strategic planning. Today 80% of Fortune 100 companies publicly display their public values, and many franchisors do the same. They adorn front entrances, HR materials and presentations given to franchise candidates.

If core values are properly defined, it will foster a certain culture across the organization as people with the same values will:

  • Follow the same rules
  • Establish the same norms
  • Develop mutual respect
  • Have similar tolerances

Linking core values to franchise business planning is an excellent tool for motivation, since the hardest part about strategic planning is not necessarily figuring out what to do, it is how to align your franchisees and home office team around it.

Strategic Initiatives

Franchise business planning is clear way to put strategic initiatives into motion. For example, if you are transitioning to do more business off-premise, there could objectives from the following perspectives:

  • Marketing to let local customers know of this option, online and in the community
  • Training to help store staff learn new process around delivery
  • New packaging to help food stay crispy during delivery
  • Tours of facilities via video instead of face-to-face

Planning on the franchisee level helps you be a more consistent organization as you encounter changes.

Collaboration and Relationships

Sitting down on a quarterly or monthly basis, can be one of the most valuable activities that you provide to your franchisees. Creating two-way communication, where you are talking about their goals, especially when some of those are created together is powerful. If you reach the goals, you did it together. If you don’t, you will have some insight together.

Of course, collaboration does not happen unless there is some humility and a genuine desire to connect. But if it is there, it will pay back many times over for the franchisor.

Focused Communication

A problem in many franchise systems is an over-communication from home office. When there is too many e-mails, webinars and trainings, franchisees can become ‘numb’ and stop listening. Setting up a proper business plan reminds franchisors to keep focused on a few important things, and not burden franchisees with more.

Last Word

Before completing this exploration of Franchise Business Planning, there is one more idea. Paradoxically, sometimes processes can get in the way of what you want to do. For example, getting every single marketing piece approved can create a bottleneck, if the Marketing team is not appropriately staffed. Business Planning can also create problems, such as the following:

  • Trying to reach goals, when an unforeseen event has occurred, like a Natural Disaster or a Pandemic.
  • Sticking to old goals when there has been a disruptive innovation in the marketplace, such technology facilitating off-premise.
  • High sales expectations, that go unmet, can lead to overspending on staff or inventory

None of the above is intended as an argument to eliminate planning, they are things to keep in mind as throughout the process. In general, the business plan is part of a unique ecosystem in the franchise model. It sits within that ecosystem and is influences by its shifting nature.



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Why is Franchise Business Planning so Important Today?

By | Business Plans

“If you fail to plan, you plan to fail.” And, never has that statement been more true. As the global landscape shifts rapidly, franchise leaders need to set a clear path in times of uncertainty. According to Harvard Business Review, “entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs”. As a franchisor, you want to be sure to lead that planning effort.

Industry veterans know that working hard alone is not going to put your franchisees ahead of the competition. There are many, both on the local level and nationally, who put forward a strong effort. But working on the right things will ensure that your franchisees have the best chance at success. In short, it is about working smart.

Additionally, a flexible process where the Franchise Business Consultant (FBC) and the franchisee co-creates the plan, and checks in at regular intervals, can help you have the discussions that you need to have, and make adjustments when needed. To distill the value down of what a franchisor offers a franchisee, it is a combination of:

  • Brand, as a noun and verb
  • Processes and support of them

If you are not planning, there are a few important questions. What processes are you supporting? Are you supporting ones that will actually foster growth, efficiency, and risk mitigation or is this a rudderless ship? A trip with no direction, could mean that no matter how talented or hard-working people are, they will not achieve results.

In a franchise context, planning can create a sense of unity and collaboration. For the benefit of the brand as a whole, it means that franchisees will make similar changes at once, enhancing consistency. From a collaboration standpoint, there is a flow between the franchisees, who see what is happening in the field, and the franchisor, who has more strategic expertise. This flow can create some exciting collaborative experiences that get results.

As we navigate this time of change together, it is important to put our best foot forward. To create value for the franchisees and help grow your system while keeping the pillars of brand consistency and collaboration strong, providing a plan which is worked on collaborative is one of the best resources that you can provide.



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Franchisee Comeback Plans

By | Business Plans, COVID-19
Are you preparing to help franchisees make a big comeback once the lockdown ends? We work with over 100 franchise brands and this gives us a unique perspective on what different franchisors are doing to help position their franchisees to thrive as the economy slowly returns to normal. Using these ideas, you can overcome the hardships brought forth by the COVID-19 pandemic.

Comeback Plan Overview

We’ve prepared a generic franchisee comeback plan to serve as a basis for your own efforts.  Let’s go through the plan together to explain the various elements and complement the work you’ve already done. To put some structure around this comeback plan, let’s think of it like a standard business plan a coach would collaboratively define with their franchisees.
To come back from this crisis, there are 4 key objectives that we define here in this comeback plan:
  • You need to be able to weather the storm financially
  • You must pivot to the new operating environment
  • You aim to keep your employees and customers safe
  • You want to bounce back rapidly via sales and marketing initiatives
To do this, we are using the Objectives and Key Results (OKR) methodology. We don’t need to go deep in the terminology to explain our plan, but let’s at least explain these concepts.
  • An OBJECTIVE is your goal and aligns everyone in simple terms
  • KEY RESULTS are how you measure your success; you can’t control this outcome
  • INITIATIVES are activities trying to achieve objectives, which you can control 100%

Objective #1:
Weathering the Storm Financially 

When we are talking about weathering the storm financially – the goal of the franchisee is to stay in business. The pandemic brings a lot of uncertainty, making cashflow management difficult. This will likely be the main conversation topic between the coach and the franchisee. When you look at this, it begs the question “how do you measure if you weathered the storm after the quarter”? The pandemic brings a lot of uncertainty, making cashflow management very difficult. All of the following Key Results are samples only, and the values themselves should be customized for your business.
  1. Maintain 12-months of runway – meaning you have enough cash to pay your rent and employees. If you don’t you need to put something in place today – which will be a loan, gov grant, subsidy, or any other type of relief.
  2. Measure having an EBITDA that is not losing 20% of your sales or more. If you are beyond that ratio, maybe the business should shut down completely and take a financial hit for the rent, but not operating.
  3. Reach a debt-to equity ratio under 0.75. The goal is to make sure that you will have enough cash in the future to pay off the debts that you incur today.

Although we touch on cash flow, profitability and balance sheet with these three indicators, most franchisors are focused exclusively on cashflow in the short term. Profitability and debt service aren’t as much of a focus right now (other than thinking of them while you figure out your cashflow issues), but they will become critical over the next few months.

In terms of initiatives, these are things that you can do concretely:
  1. Develop cashflow model with three scenarios (optimistic, pessimistic, realistic)
  2. Perform weekly cashflow review
  3. Apply for government relief
  4. Negotiate relief with landlord, suppliers and lenders
  5. Negotiate with bank to assist with cash flow by increasing the line of credit
  6. Develop strategy for worst case scenario (equity investment from a new partner, divestment to multi-unit operator or shutdown)
These activities are within your span of influence. You may not have 100% control over whether or not you will get government relief but you know that you can apply. If that initiative fails, then you may need to revisit your plan and see what other initiatives you can do to stabilize your cashflow situation.

Objective #2:
Pivot to the New Operating Environment

The world has changed, so we have to take an honest look at how the world is today, and you are going to have to adapt. Restaurants are letting customers order ahead, or arranging curbside deliveries. Service franchisors are doing remote meetings instead of face-to-face. Some stores are changing their layouts to accommodate new practices such as having a new cooler for meals while they wait to get picked up. No matter what your business, it has to adapt since this is a new world.
Key results associated with this include:
  1. All employees have completed the franchisor’s new training course – checking that everyone is aligned with your new operational processes
  2. Keep labor costs under 33% of sales – the actual ratio will vary based on your cash flow targets, but your staffing plans will likely have changed
  3. Keep COGS under 33% of sales – you may need to change how you operate to reach this goal
Initiatives connected to these Key Results include:
  1. Attend franchisor webinars / watch franchisor videos
  2. Implement franchisor’s new workflows to be aligned with the new environment
  3. Define new work schedules based on cashflow scenarios (reduced hours/staff, etc.)
  4. Define reduced product offering to minimize inventory carry
  5. Update product availability across all online platforms
  6. Consider grocery staples and produce baskets additions to meet supplier minimums
  7. Perform daily sales/inventory reviews and compare to cash flow models to be more efficient on inventory ordering
Although there are some businesses, such as those in pizza, who are not losing a lot of business, most have to adapt to the new situation. Think about what changed in your business and how you can determine if a franchisee is ready for the new world.

Objective #3:
Keep your Employees and Customers Safe 

Third objective is about keeping people safe – that is key. At the highest level, if you don’t do this, you are going to get in trouble. People are posting on social media about businesses that are laggards in this regard. This damages the brands reputation, even if it is just a matter of one or two franchisees. On top of that, there are lawyers driving around looking for employers to sue, since employees do not feel safe. This is a risky environment for business people.
Key results that could help you measure the objective include:
  1. No employees or customers are contaminated at your place of business – hard because maybe they get infected at the grocery store, but nice key result to aim towards
  2. Have all employees perform new COVID-19 training material – specific procedures related to sanitization and such
Initiatives that support keeping everyone safe include:
  1. Install new recommended signage / protective barriers / sanitizing stations
  2. Train staff on new COVID-19 procedures (cleaning, disinfecting, social distancing,  recognizing symptoms, etc.)
  3. Perform check-ins with staff to ensure they feel safe at work
  4. Monitor your franchisor’s communications daily to stay abreast of best practices
  5. Communicate with local health to learn about local regulations which apply
Keeping people safe is challenging for franchisors as they aren’t necessarily able to visit the units during the lockdown. They must influence franchisees who actually execute these best practices to keep people safe. Fortunately, most franchisees are welcoming of these initiatives and see value in their franchisor helping them implement best practices.

Objective #4:
Bounce Back Rapidly Via Sales and Marketing Initiatives

Overall, we are going to go through a recession. As a result, people will be strapped for cash and some businesses are going to be in trouble. It has been proven that doing marketing during a recession or a downturn helps during the recession and after. There are lingering results of consistent and effective sales and marketing. That market share that you can capture will be important. Although businesses want to control variable costs, the cost-cutting should not occur in the marketing area.
That being said, you want to be delicate. You want to make sure that your marketing initiatives are in tune with the demands in the marketplace. You cannot be tone-deaf or too aggressive and you have to operate with tact.
Key results associated with this include:
  1. Achieve 250 marketing campaign conversions – measuring the success of whatever pandemic-aware campaign you are running
  2. Add 250 new customers to our loyalty mailing list – a bigger list you can market to on a continuous basis
  3. Receive 250 new downloads of our app – expanding the list of people you can reach with promotional offers
  4. Increase average transaction size to $20.00. Online transactions are great but they can create a lot of busy work. If you can tack on upsells like grocery staples, it can benefit you.
Initiatives that support the Sales and Marketing objectives include:
  1. Review tone and messaging of the franchisor’s proposed marketing campaigns
  2. Perform one community engagement campaign. There are a bunch of franchises like sponsor a meal for front-line workers, where the franchisee delivers that food but gets paid for by a member of the community – it is a paying it forward. It also helps them achieve the minimums they need to keep to order from certain suppliers
  3. Perform a marketing campaign on social media
  4. Perform a direct mail campaign
  5. Perform a PR campaign; contact 3 local media outlets to pitch them the story.
  6. Perform an email blast campaign to loyalty/app members
  7. Perform weekly marketing ROI analysis and course correct if needed

Operationalizing Your Plan

Overall, the franchise comeback plan is defining the key results, the initiatives and objectives that you will be reviewing on a recurring basis as a franchisee and a coach. Typically we are creating annual and quarterly business plans. Here is what the comeback plan looks like in FranchiseBlast:
franchiseblast comeback plan 1

Here, you can see a summary of the objectives, along with a chart showing whether or not they are on track.

franchisee business plan 2

They Key Results and Initiatives are also seen, aligned with their relevant objective.

franchisee comeback plans 3

On each key result, you have an opportunity to check in, show whether or not you are on track, and put in a note for future reference.

With FranchiseBlast’s Business Plan module you are able to collaboratively define the comeback plan and, more importantly to avoid it sitting on a shelf and going stale, come back to it on a recurring basis.

You can also choose to implement your comeback plan as a self-assessment which would be more in line with a simple checklist. By sending out the self-assessment on a recurring basis, it stays top of mind. The individual questions would be formulated a bit differently (Did you perform your weekly cashflow review? Do you have enough cash for the next 3 months in a pessimistic scenario? etc). This model is a better fit for franchises where franchisee engagement is not currently optimal and/or franchisors who have had to furlough a large portion of their teams. In both of these cases, it is difficult or impossible to setup coaching sessions to review the comeback plan.

Download the Comeback Plan Now!

We are pleased to offer the Franchise Comeback plan in PDF form below, to help you with this effort.



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7 Common Franchise Business Plan Mistakes

By | Business Plans, Franchise Relationships
Franchise Business Plan Mistakes
Making a mistake in franchising is both painful and embarrassing – especially when you really care about your franchisees and their success. So… as a Franchise Business Coach, are you really setting your franchisees up for success with their franchise business plan or are you just going through a “tick-box exercise”? We discussed planning with several franchisors, and we came up with some of the biggest mistakes, and how you can avoid them.

1. Mistaking Cash for Profits 

Franchisors around the world have been focusing on franchisee profitability over the years, but it is good to remember that cash flow is very important in any small business. Profit is an accounting concept and not necessarily money in the bank. You want to make sure that you are tracking both as you are balancing cash-in and cash-out with your franchisee.

2. Ignoring the Bad Year Before 

An experienced franchisee knows the long-term ups and down. If you have owned a business, you also know that it can sap the motivation right out of you and you can start the year feeling like a deflated balloon. A wise franchisor once told me at an IFA Convention: “To help the franchise out, tap into why the bought the franchise in the first place. Were they creating a vacation fund, a life of more abundance or a legacy for themselves? Reharness that energy to help them overcome that challenge and move to the next phase.”

3. Not Sweating the Details

You want to get the details right. In fact, the value of the franchise business plan is to understand details including who is doing what, and when that is going to happen. Business planning is the opposite to throwing caution to the wind, it is a time to sit down and look at the specific key results that will link to each objective or goal, and who is accountable for each. This helps understand workload and balance it out for everyone. Contrary to the popular book, in this case, you DO want to sweat the small stuff!

4. Hitching their Wagon to the Franchisor’s Star

As discussed earlier, franchisees hitching their wagon to the franchisor’s star will not help them in the long run. Franchisees are much more likely to be successful if there is a personal element to their plan, such as saving for another unit or becoming a mentor to others.

5. Overvaluing Experimental Ideas 

While it is exciting to work on a new initiative, such as a National Account or a new SMS Marketing initiative, overvaluing projected results to be at their most optimistic level will not help the franchisee in the long run. Before you know it, when the campaign plays out to a below-par result, the finger-pointing will begin. Be conservative with the projected results of the campaign, and then if they are better at the end of the day, you will be pleasantly surprised.

6. Not Experiencing New Initiatives 

Sometimes a franchisee needs to see to believe in terms of recommended elements in the franchise business plan. Code Ninjas, for example, has franchisees attend two grand openings before they go live themselves, and one after. This not only creates a realistic expectations, but it also helps with the practical side of budgeting to have the event that is right for them.

7. Mistaking Deviation for Adaptation 

Sometimes a franchisee will have a creative initiative in the plan, which can be a good thing. People have to adapt to their market, such as McDonald’s Teriyaki burger in Japan, or serving wine in France. However, sometimes those initiatives will deviate from the Franchise, and create confusion in the market about the brand. When looking at initiatives, you want to understand if it is bringing the brand forward, or setting it backwards.

Last Word 

Planning the right way means tracking progress throughout the year. Check out FranchiseBlast’s Audit and Brand Consistency tools to learn more about tracking progress along the way.


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How to Create a Killer Franchise Marketing Plan

By | Business Plans, Senior Care
Franchise Marketing Plan
Brand consistency is so important, as is getting leads. Sometimes in franchising, it can feel like those things are at odds. Sometimes franchisees will feel the need to “go rogue” and do their own thing to get the leads they need. Other times, those “off brand” initiatives can create problems and confusion in the marketplace for their neighbors. According to a study from Demand Metric, 71% of respondents said an inconsistent brand creates confusion in the market. In this article, we will look at how you can create a Killer Marketing Plan for your franchisees, while staying true to the parent brand.

Understand Trends

Marketing is very much a discipline which relies on trends, both in the way that people consume and the way that people communicate. Google searches to show marketing trends in your vertical, or within your typical  marketing mix are a great start. If you want to go further, you can do a competitive analysis (having a group “competitive database” where franchisees submit competitors local to their market can be a fantastic and collaborative way to do this) or you could engage in a formal market research exercise. Sample trends include:
  • Increased use of Social Media.
  • Aging population.
  • Reduced use of mail system.
  • SMS messaging increases.
  • Increased awareness around mental health.

Determine Target Audience

Overall, you want to determine your target audience at the brand level. But franchisees will have a subset within their region that they will want to focus on. For example, they may have an ethnic group in their area that is very oriented towards the food at your restaurant such as a vegetarian option. Or, if you are in senior care, there may be an aging population in a certain part of your territory where houses were built in the 50s. This can help the franchisee drill down effectively.

Franchisor

  • Sports Fans
  • Parents of Students Taking the SAT earning 100k+
  • Health-conscious single women

Franchisee

  • Toronto Blue Jay Fans
  • Parents of Students taking the SAT earning 100k+ living in Coral Gables
  • Health-conscious single women who shop at Whole Foods in Manhattan

Make a List of Marketing Goals

Some of the goals may be linked to a central, corporate initiative. Others could be associated with the franchisee themselves, such as an kids extracurricular program franchise making a big “splash” at the annual children’s festival. But marketing goals will differ from system to system.  Goals can be project-based or metrics-based, and you always want your goals to be SMART.

Franchisor

  • Rollout updated branding guidelines to include SMS rules to system in Q1.
  • Test Instagram marketing with 12 Influencers in 3 markets in Q2.
  • Create central campaign for April tax season as per FAB meeting notes by Q4.

Franchisee

  • Increase leads from Social Media to 10/month at a cost of $40/lead by end of Q4.
  • Execute a 5,000 piece direct mail campaign, repeated 4x by end of Q4.
  • Rollout April tax season campaign managed by corporate by Q2.

Determine Franchisee Marketing Tactics Based on Marketing Mix

One role that the franchisor can play is to determine the right marketing mix for the system. While there will always be a certain amount of experimentation, the marketing mix should be defined. For example, PPC and Direct Mail may be the right combination for your system. Others find that Facebook is as good as gold. No matter what, you want to have your franchisees to complement your marketing mix.
Different systems do different things in terms of execution. Clearly, if the franchisee is not executing on a tactic, you want them to have a follow-up task.

Franchisor Marketing Mix

  • Direct Mail
  • Events
  • Doctor Referrals

Franchisee Tactic

  • Rollout Direct Mail from library
  • Do 1 event/month
  • Make 10 introductions to Doctors/month

Determine KPIs

Now that you have set Marketing tactics, you want to see what KPIs will be connected with them. This will help you measure final results, and track key milestones along the way.

Franchisee Tactic

  • Newsletter
  • Events
  • Customer Retention

KPI

  • Open Rate and CTR
  • Leads/Event and Cost/Lead
  • Lifetime value of customer

Set Marketing Budget

Of course, when starting a franchise, this may mean using newly acquired funding, borrowing or self-financing. One thing to remember is that marketing is absolutely essential to the success of any franchise. When setting tactics for your franchisees, having ones that are low or no cost is important for those who may be struggling.

As the franchisee begins to gather costs for the marketing tactics outlined in the previous step, they may find that they have exceeded your budget. Simply go back and adjust your tactics until the mix is affordable. The key is to never stop marketing — don’t concern yourself with the more costly tactics until the franchisee can afford them.

Determine Review Cycle

Don’t forget, this is a marketing plan, not a marketing bible. You will want to review both results and tactics monthly, quarterly or twice a year.
Interested in learning more about KPIs and tracking? Check out our Scorecard eBook!