Deciding whether to franchise is one of the hardest decisions for a young concept.
There’s the potential for rapid brand development and an immediate capital infusion. There’s also the potential for mayhem, as ill-trained franchisees could sully the image you’ve worked so hard to build.
The 2017 NRA Show’s Innovations in Fast Casual & Pizza Summit took on this hot-button topic with a well-attended franchising panel. Here are some of the top takeaways from the franchising vets who spoke.
2. Franchising challenges
Government regulations—from menu labeling to state-specific franchising laws—cause headaches. Invest in a solid franchising attorney, vets say. “The government regulations are not one size fits all,” says Pita Pit President Peter Riggs. “But you have to comply … The biggest difficulties are people and the government.”
3. Above all, build a solid brand
At its heart, franchising means entrusting other operators to give your brand the same love and care that you have. That’s impossible to do without first building a rock-solid brand identity, along with clear operational systems. Develop a standards manual for all parts of the business, Pizza Ranch’s Achterhoff says.
Rosati’s Pizza suffered through an early, failed franchising attempt. Franchised stores sported different logos. Experiences within each varied greatly. So, the chain’s leaders stepped back, attended franchising seminars and turned to franchising organizations for education and advice. “You have to have a system you can build on,” says Marla Topliff, president of Rosati’s Pizza. “You can’t just start opening stores without a system … We can’t be a franchise without being a restaurateur first. You need to have a good concept to sell first.”
4. Be prepared for life to change
Becoming a franchisor requires a shift in focus. “You can’t just run your business,” Pita Pit’s Riggs says. “You’ll be spending less time on day-to-day operations and will be focusing more on the business side of things.” Operators need to be prepared and ready for that change.
5. Give franchisees everything they need
After rapid growth, Pita Pit leaders realized some franchisees were struggling. So, they’ve rededicated toward training and operational systems to arm each of the more than 200 franchised units with success. That responsibility can trump running corporate stores. “We need to focus more on being a better franchisor and less on being restaurateurs,” Riggs says.
6. Nurture those relationships
Having a strong brand foundation and communicating the corporate culture to franchisees is essential to preserving and growing a restaurant concept. That requires unrelenting effort on the franchisor’s part. “Most days, I’m a mom with, like, 300 children,” Topliff of Rosati’s says. “That’s what it feels like. You don’t want to say something to upset your child but you want to make sure they understand. You need a good balance between franchisor and franchisee. Team spirit is very important.”