Franchise Success External Factors

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If your franchise opportunity has weak external factors, your company will not thrive. You will experience ramp-up problems. It is that simple.

The success of your company depends on having a viable concept that has:

  • sufficient financial rewards
  • flexible, yet strong legal documents that reflect your business
  • a win-win culture with aligned values
  • a strong brand and message
  • communications, operations, support, and training systems and programs conducive to the replication of results across your entire franchise network  

Your company’s overall success and growth depends on the existence and the strength of all of these elements. The success of individual franchisees, however, rests on something else: their brains -which give them the ability to implement your winning system.


Your concept is the business idea and model you use to attract and serve customers. It has to make sense and produce results. It has to stand the test of time.

It must allow for the replication of results by others. In other words, it must be simple enough so others can be trained in its operation.

To evaluate your concept, consider these questions:

  • Is your concept sustainable, or is it just a fad? Will it stand the test of time?
  • How does your business stack up against the competition?
  • What’s unique about your business? What is the “sizzle”?
  • What ongoing value do you provide to franchisees and customers?
  • Will your business continue to produce the desired financial return as it adapts to changes in technological and economic conditions?
  • Is your concept simple enough that you can teach it to others?
  • Will your concept and business model keep franchisees engaged for the long haul?


Financial and economic factors are vital in any business. If your business doesn’t produce financial returns commensurable with the required investment, you have no business proposition. Without a proven financial model no company should even consider franchising.

To evaluate the financial factors of your company, consider these questions:

  • Is there a strong and growing demand for your products and/or services?
  • Does your business generate financial rewards appropriate for the required investment?
  • Does it have an attractive ROI for you and for your franchisees?
  • Are costs controlled or controllable?
  • Are some of the economies of scale benefits passed on to franchisees?
  • Do you have reliable vendor relations?
  • Is your business subject to fluctuations in the economy? How does it do during tough economic times? How recession-resistant is it?
  • Can your franchisees produce results quickly?
  • Will your products and services be accepted by people in every region of the country? How much modification will they require to account for regional differences?


The importance of social factors in franchising are often underestimated, but they are fundamental elements of franchise success. Social factors include community involvement, company culture, your company’s leadership and franchisee support.

You’ve heard it: franchising is all about relationships – the relationship between franchisees and franchisors, the relationship between franchisees and their customers and employees, the relationship among franchisees, the relationship with vendors, and the relationships between franchisees and their local communities.

The culture of your company guides these relationships; and you, as part of the company’s leadership, set the culture. It is all intermingled, but it starts with you and the senior staff –culture is created by the leaders.

To evaluate the social factors of your company, consider these questions:

  • Do you have a win-win culture?
  • Do your leadership and communication styles match your franchisees’ preferences?
  • Are your company’s values aligned with those of your franchisees?
  • Are you building team spirit at employee and franchisee levels?
  • Do you nurture the interaction and support among your franchisees?
  • Do you foster the contributions of your franchisees to their local communities?
  • Are your leadership and communication styles strengthening or weakening your relationship with your franchisees, employees, and customers?
  • Is your organization committed to the success of your franchisees and supporting them to achieve the results they seek? Does every one of your employees truly buy into this commitment? 


The marketing aspects of franchise success include your company’s branding and the marketing message that creates interest in your products, services, and your franchise opportunity. It also includes your franchise sales strategy as well as the message that you share with prospective and current franchisees. Yes, you need to be constantly marketing to your existing franchisees!

Building a recognizable brand does not happen overnight; it takes time, effort, and money. Today social media and the internet allow you to generate a greater brand exposure at a fraction of the cost of traditional advertising. Remember, branding is more than a logo; it encompasses your company philosophy, its story, its value system and value proposition, as well as the customer and franchisee experience your company creates. To be effective, this message must be communicated on a consistent and timely basis.

You know that to have successful and long-lasting franchise relationships, the culture and leadership styles of your company must be a good match with your franchisees’ preferences and value systems. Start making this match when you first introduce your opportunity to a prospect. Tell them your story, not just the features and benefits of your offering. But don’t stop there, make ongoing marketing to your franchisees part of your culture. Help them remember why they became part of your team and the value you bring to their businesses on a daily basis.

To evaluate the marketing factors of your company, consider these questions:

  • Are you being successful at building your brand?
  • Are the perceptions of your prospects, franchisees, and customers in line with what you are trying to accomplish?
  • Are you attracting the right franchise candidates?
  • Are you attracting enough customers for your franchisees?
  • Are you fully utilizing the technological solutions available to you to build brand awareness?
  • Is your marketing strategy providing the results you want?
  • Are you telling a compelling story?
  • Are you conveying all that is important to prospects, franchisees, and customers?
  • Are you marketing to your franchisees or do you stop doing so once the franchise agreement is signed and you’ve got your check?


Your franchise success starts with well-drafted legal franchise documents that take into consideration your company’s business model, its uniqueness and your objectives, and that provide the framework for your desired growth. Your legal documents must be flexible enough to allow for adaptation when faced with fluctuations in the economy and technological advances that change the business environment.

Make sure you start by having a real plan and vision in place and that this strategy is reflected in you legal documents. Weak, unyielding franchise legal documents will prevent your growth and create franchisee conflicts. Start with the right foundation and if you don’t have it already, change it!

To evaluate the legal factors of your company, consider these questions:

  • Do your franchise legal documents reflect the way you operate, your growth strategy, your vision, and your culture?
  • Are your legal documents flexible, yet strong enough to produce the type of relationships you desire with your franchisees?
  • Do you have a legal compliance or a relationship-based company culture? And, do your documents reflect it? 
  • Have you created procedures that generate legal compliance, yet promote healthy and amicable franchise relations?
  • Do you and your franchisees understand that your operation manuals are an extension of your legal agreements?

C.O.S.T.  – Communications, Operations, Support, and Training

Not paying due attention to franchisee communications, operations, support and training can cost you greatly.

Are you one of those franchisors who subscribes to the fallacy that these factors are expenses to cut down when franchise sales are down? Or, are you one of the smart franchisors with vision who appreciate their true nature as revenue generators? Although not always lethal, lack of attention to communications, operations, support, and training will certainly slow growth down and reduce revenues.

To evaluate your C.O.S.T. factors, consider these questions:


  • Do you know how to communicate effectively with your franchisees?
  • Do you have the systems that allow your franchisees to communicate with their clients?
  • Are you engaging when communicating your story and your values?
  • Do you listen to your franchisees? Do you have a system to capture and evaluate their feedback?
  • Do you understand the emotions behind the comments of franchisees?
  • Do you treat your franchisees as people or as numbers?
  • Do you communicate frequently enough? Or, perhaps, too often?
  • Do your communications add value?
  • Do you know how to give feedback to your franchisees that will produce the desired results?


  • Do you understand that operations means the A-Z’s of running the business (such as: correct use of branding; marketing; selling; serving customers; communicating with clients and with you as their franchisor; day-to-day activities; performance measurements; bench marking; managing the business and employees; financial processes; technology; tools; equipment; application of technical knowledge; best practices; and so on)? Have you spelled out all of these elements for your franchisees in a way they can easily implement?
  • Do you know how to break down each task under each component of the business to ensure the desired results?
  • Do you provide effective tools for each component of the business?
  • Are your operation manuals easy to read, understand, and implement? Are they online?
  • How current are your operations and procedures manuals?
  • Do you know how to conduct franchise performance audits?
  • Do you have a methodology in place to incorporate best practices?
  • Have you developed bench-marking metrics to monitor the financial strength of franchisees? And, do you have an operational plan in place to assist those who are falling short?


  • Is your support system producing the results you need?
  • Do you offer support in all areas of the business?
  • Do your franchisees feel the support you provide is adequate for their needs?
  • Does everyone in your organization buy into a support philosophy?
  • Does your support system take into consideration the latest information, and incorporate the best and latest techniques to help your franchisees learn and grow?
  • Do you have a successful coaching program – one that incorporates knowledge of brain science?
  • Is your support system timed according to the progress of and the stages franchisees go through?
  • Do you customize your support according to the needs of franchisees?


  • Do you break down concepts and tasks in such a way that your franchisees can understand and implement your system?
  • Is training a one-time event or a way of operating your company and part of your company’s culture?
  • Do you use your operations manual as the foundation of your training program?
  • Do you test for competency and understanding?
  • Do you include exercises that allow franchisees to win and to gain confidence?
  • Do you train franchisees in various settings (classroom and field)?
  • Has your ongoing training lost the personal touch?
  • Does your training build team spirit and interdependence?
  • Does your training address the fears a new franchisee goes through?
  • Can your training produce immediate results so as to build self-confidence?

As you review all of these C.O.S.T. factors, the most important question to ask is:

“Do you know how to consistently get the Best Results Achieved and Integrated Naturally System wide?”

In other words, are you taking the inner factors of franchise success (your franchisees’ brains) into account when designing and/or improving the external framework of your franchise offering? Are you considering C.A.S.H. (Confidence, Actions, Skills, Habits?

Don’t know where to start?

We can help.