3 common difficulties for franchises and possible solutions
The franchise was designed as a scalable business model, as it is based on a balanced relationship between franchisor and franchisee that is different with each new opening.
Nevertheless, the specific nature of these relationship does not preclude either the failure of certain projects or the identification of difficulties common to the sector, which are linked in particular to issues of growth and scale.
From the conception of expansion strategies arises a first obstacle. While it is relatively easy to determine where to open a franchise in a city that is well known, expanding to an unfamiliar territory appears to be much more complex, on a large scale (which zone to select at the scale of a country, of a continent, or even of the world?) as on a small scale (in this zone, which district, which street to select?).
In addition, there is no expansion without recruiting new franchisees. Convincing and attracting them is relatively easy when managing a network of only a few franchises; however, as expansion accelerates, there is a problem in terms of data collection and the scale of analysis on which to base future profitability.
Finally, managing and regulating a franchise network when it is scaled up becomes a complicated task. How can you ensure the absence of cannibalization, and the existence of exclusive zones, or the support of business through marketing campaigns: even though the collection of data, like the analysis of each establishment, is carried out with more complexity?
In this white paper, we provide an overview of the methods available to meet these challenges and improve your business. You will discover how consulting, geomarketing studies, and Location Intelligence can assist you in managing your network.
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