FRANCHISE ASIA JAN 2016

International Focus
When looking at the most successful franchise brands you can
see that most share common traits and characteristic and most
of them have identified, invested in and maintain the following:
• Excellent franchisees
• An experienced, energetic & focused management team
• Effective manuals and “operating” tools
• Effective training programs
• Strong leadership
• Outstanding franchisor/franchisee relationships
• A sound business and financial plan
• A customer (guest) focused attitude
When you consider investing in a franchise business keep in
mind that franchising is a growth strategy and not a survival
strategy. If you determine that the brand you are talking
to needs to franchise just to stay afloat you should look
elsewhere for franchise opportunities as the brand needs to
re-examine its competitiveness and the fundamentals of its
business. Some key reasons for brands to use a franchise
developmentmodel include:
• Accelerating their expansion and market penetration
• Minimizing their contingent liabilities
• Minimizing their management procurement challenges
• Reducing the daily challenges of direct management
• Generating income based on store openings and recurring
income from gross sales
• Reaching target consumers more effectively
• Improving efficiencies and economies of scale
• Generating supplemental income from products
and services
• Capitalizing on advertising pooling potential
You should also carefully consider these 10 essential issues
when you evaluate a franchise business:
• The brands vision, mission and values and its reputation
and public image
• The long term commitment of the brands shareholders
• The capability and experienced of the brands
management team
• The uniqueness of the brands products and services and if it
has broad appeal
• The overall competitiveness of the brand
• The financial track record of the brand
• The anticipated break-even point & return on
your investment
• The ease of transferring and replicating the concept
• The ability to maintain and deliver consistent standards to
your customers
• The completeness and adequacy of the “SYSTEM” (Manuals,
Processes & Tools)
• The quality and adequacy of the training program
Beyond these 10 essential considerations detailed above you
should also ensure that you understand the business and
how it operates in terms of the outlet prototypes, the brands
key competition, the target market and consumer profiles,
the brands marketing strategies, your investment cost and
anticipated return and the fees you will be required to pay to
the brand owner.
Before you make a final decision about the brand you should
also make sure that the brand is going to provide you with
an operations manual, training & ongoing guidance support,
details of site selection criteria, standard pans & specifications,
initial & ongoing advertising & promotional support, a list of
and access to the required products, strong identity & brand
usage guidelines, and access to continued improvements and
enhancements in the system.
While understanding the brand you are considering investing in
is obviously very important it is even more important to know
and understand yourself and you should ask and answer the
following questions:
Franchise Asia • 2016 Vol 31
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