Franchise Growth

Learn more strategies for franchise growth.

What Are the Stages of the Franchise Development Process?

July 3, 2023/in Franchise Development, Franchise Growth/by [email protected]

The stages of the franchise development process should ideally be customized to meet each unique business’s needs, but in general, will include the following:

Partnering with a franchise development partner
Conducting a brand evaluation
Developing a franchise model
Filing franchise paperwork
Preparing marketing materials
Presenting the franchise to brokers
Onboarding, training, and supporting franchisees

In this blog post, we are going to discuss each step in the franchise development process and what you need to be conscious of when choosing the right partner and going through the process.

1. Partner With an Experienced Franchise Development Partner

The stages of the franchise process can be complex. But the more prepared we are, the better we can ensure a seamless franchise launch and franchisee onboarding process.

Trying to launch and/or expand your franchise alone is not advisable, particularly if you’ve never expanded a company into a franchise before. Instead, partner with an experienced franchise development partner, such as Pinnacle Franchise Development.

An experienced franchise development partner can help you illuminate your vision and implement a strategy that works. They will keep you feeling informed about the steps in the process and will ensure your desires and needs are being met.

2. Evaluate Your Brand and Look for Opportunities

Once you’ve partnered with an experienced franchise development partner, the next step is to conduct a feasibility study.

Since you have an established business, you already know what’s possible in your current location. You know your local market well, but franchising a business requires the capacity to expand and apply your business model to many different territories. An experienced partner will answer questions like:

Will the market demand hold up?
Will customers in other territories respond well to your brand?
Is it possible to apply your business model to multiple locations or does it require some adjustments?

During this investigation stage, you’ll get a sense of what’s possible. It’s also a chance to look for more opportunities to elevate your brand, such as by connecting with new vendors or improving your current marketing efforts.

3. Develop a Solid Franchise Model

The investigation stage of franchise development naturally leads into the franchise model development stage. Here, you’ll need to figure out issues such as franchisee eligibility requirements, fees, royalty percentages, sources of equipment needed for franchises, and key performance indicators (KPIs) to determine minimum franchise performance parameters.

Franchisee Selection: Establishing franchisee eligibility requirements allows the franchisor to attract and select candidates who have the necessary skills, experience, and resources to successfully operate a franchise unit.

Financial Considerations: Determining fees and royalty percentages helps the franchisor establish a fair and sustainable financial structure. It ensures that franchisees understand their financial obligations and allows the franchisor to generate revenue while providing ongoing support and maintaining brand standards.

Equipment and Supply Sources: Identifying reliable and approved equipment sources for franchises ensures consistency in product quality and operations across all franchise units. It helps maintain brand standards and facilitates efficient procurement for franchisees, minimizing potential operational disruptions.

Performance Measurement: Establishing KPIs is crucial for monitoring and evaluating the performance of franchise units. KPIs provide benchmarks for franchisees to strive for and enable the franchisor to assess the overall health and success of the franchise network. By setting minimum performance parameters, the franchisor can ensure that franchisees meet certain standards and contribute positively to the brand’s reputation.

Addressing these aspects is vital for maintaining consistency, quality, and long-term success within the franchise network. It establishes a solid foundation for franchise operations, promotes brand integrity, and supports the franchisees in achieving their business goals.

4. File the Appropriate Paperwork

In order to operate a franchise, you’ll need to register as such with the Federal Trade Commission (FTC). Depending on where you’re located, you may also need to register with your state.

Important note: every franchise location in a different state will require this registration process.

5. Prepare Sales and Marketing Strategies and Materials

You need to present your brand in the best possible light, both when recruiting potential franchisees and when marketing the brand to the end consumers. To do this, you need to develop a comprehensive marketing strategy for your franchise. This includes developing brand style guidelines and all marketing materials like:

Social media advertising
Influencer marketing
Website content
Landing pages
Billboard and print advertising

All marketing materials should be a result of an overall marketing strategy. Developing one-off tactics is almost never a good idea. It leads to inconsistency and confusion for your audience. An experienced franchise development partner will ensure your marketing materials are all working toward a greater goal.

6. Present Your Franchise to Brokers

When all preparations are complete, it’s time to present your brand to franchise brokers. Franchise brokers are professionals who can connect your brand to potential franchisees who meet your eligibility requirements. While partnering with franchise brokers is not a requirement, they offer a higher quality candidate than digital marketing efforts alone.

All of the hard work you and your franchise development partner have done up to this point will prepare you to present your brand in the best light possible. Brokers want to see that you have a strong strategy backed by the support needed to be successful.

Pro tip: Results are everything. Including customer testimonials and third-party reviews will be critical for proving your value. Someone else validating your brand will always have a stronger impact than you talking about your brand.

7. Onboard, Train, and Support Your Franchisees

Finally, you can prepare to grow your franchise by onboarding and training your selected franchisees. This may occur at your headquarters or at the franchisees’ new premises (or a hybrid).

It’s important to realize that training is ongoing. Your franchisees will need continued support to build a successful franchise. This empowers them with opportunities to ask questions, address problems, and innovate new solutions.

Grow Your Franchise With Pinnacle: Get a Free Consultation

When you’re ready to begin development efforts for your business, turn to the franchise development services that business owners have been trusting since 2015.

With more than 40 years of combined experience, the professionals at Pinnacle Franchise Development can strategically apply our time-tested franchise process in a way that’s customized to your unique business. Contact us today to request a free consultation.

Tips for a Franchise Development Strategy

June 25, 2023/in Franchise Development, Franchise Growth/by [email protected]

Do you think your business could be the next Subway, RE/MAX, or Dunkin’ Donuts? If you’re thinking about fueling your business’ long-term growth by establishing a franchise, one of the first things you’ll need is a bulletproof franchise development strategy that enables you to connect with potential franchisees and encourage the most qualified leads to get on board with your brand.

Pinnacle Franchise Development offers complete franchise development services, including strategic planning and implementation. No matter your current level of expertise in the world of franchising, our experienced consultants will walk you through everything you need to know. We’ll give you a general overview of how to get started below.

Identify your ideal audience

Before you can implement a franchise development strategy, you’ll need to know which audiences to target. Brainstorm a description of your ideal franchisee. Is it:

Someone with experience in your industry
A person who has any type of leadership experience in any industry
Someone with a specific type of degree
Someone who is community-oriented
A person who cares about an eco-conscious brand

All types of franchisors, regardless of industry, will want franchisees who are passionate about the brand’s mission and core values.

Build a franchise recruitment website

Once you’ve developed a franchisee persona, you can get to work on recruitment efforts. The first step may be to build a franchise recruitment website or webpage if you don’t yet have one.

Before you get started, you need to make a decision. Will you create an entirely separate website for potential franchisees, or will you create an add-on page to your brand’s current consumer-facing website?

There’s no right or wrong answer. However, if you expect to have a lot of information for your recruitment section, it may be best to go with a separate website. This will allow you to organize information more efficiently (with multiple pages) and speak to your target audience more clearly. (Your recruitment page/site will have a very different audience compared to the audience for your main website.)

Optimize your recruitment website

Search engine optimization (SEO) is crucial for your franchise development strategy. Optimizing your site enables it to become more visible to your target audience. You’ll need to do some keyword research and incorporate the best keywords into your site copy.

The copy itself should be well-written, and it should tell your brand’s story in a way that makes leads want to become franchisees. Incorporate clear, strong calls to action throughout.

Take advantage of franchise listings

The Internet is filled with directory websites for all types of businesses, including directories specifically for franchises. Add your franchise to multiple directories in order to generate more leads. Be sure that your information is accurate. Here’s a sampling of franchise directories:

Take your business to new heights with Pinnacle

No matter where you are in your franchising journey, you can receive comprehensive services and support at Pinnacle Franchise Development.

With over 40 years of combined experience in franchise sales development, our expert team can build an impactful franchise development strategy for your business that elevates your brand and positions you for long-term growth.

2023 Franchise Outlook

June 10, 2023/in Franchise Growth/by [email protected]

In the wake of the COVID-19 pandemic, our world continues to seek a firmer footing, and businesses in some industries are struggling while franchise owners are reporting an exceptionally bright outlook for the rest of 2023.

Although many industries are facing economic uncertainty and labor and wage-related challenges, the future of franchising is looking remarkably positive in terms of job growth, unit growth, economic output, and other factors.

If you are considering turning your established brand into a franchise, now might be the time to speak to our team at Pinnacle about taking that next step. If you are a current franchise owner, you may want to explore the possibility of increasing your onboarding of franchisees and opening new units.

At Pinnacle Franchise Development, we partner closely with franchisors—both new and established—to help them reach new heights in their success story. Check out the rest of this blog to find out how the Franchise world is projected to perform in 2023.

The number of franchise establishments in the U.S.

According to the 2023 Franchising Economic Outlook—the annual report released by the International Franchise Association (IFA)—the total number of franchise establishments in the U.S. is expected to grow by a healthy 1.9%. At this rate of growth, franchises will add nearly 15,000 units.

Growth is expected to be particularly strong for service-based businesses and quick-service restaurants (QSRs). Those businesses alone are expected to average a 2.5% growth rate in 2023. For example, in 2020, there were 183,543 QSRs. In 2023, there are expected to be a total of 196,858 of these popular fast-casual establishments.

The economic output of franchise businesses

The rapid of growth of QSRs, service-based businesses, and other franchise establishments is expected to make a hefty contribution to the U.S. economy. The total economic activity in nominal dollars had been $825.4 billion in 2022. It’s expected to significantly surpass that figure in 2023, with estimates placing total economic output at $860.1 billion.

The increase in economic output is especially impressive considering inflation rates. About 50% of franchisees surveyed agreed that the support of their franchise network enabled them to withstand inflation-related issues.

In fact, CEO of FRANdata said, “In spite of all the challenges, the cooperative nature of franchise businesses helped better insulate franchise owners from macro-economic uncertainty.” This indicates it may be an appropriate time for franchisors to investigate methods of strengthening the support, training, and resources they offer to their franchisees.

Positive jobs-related data for franchise businesses across industries

The U.S. economy continues to add jobs at a brisk pace. In fact, the U.S. Bureau of Labor Statistics (BLS) reported that in May of 2023 alone, employers added 339,000 new nonfarm employees to their payroll.

In the world of franchising, we’re encouraged to see that hiring is looking notably robust. Franchisors already contribute millions of jobs to the economy, and they’re expected to add about 254,000 new jobs throughout 2023. That’s an increase of about 3% for a total of 8.7 million franchise employees.

Contact Pinnacle for franchise development services

Take advantage of the momentum happening in the world of franchising. With more than 28 years of combined experience delivering franchise development services, the team at Pinnacle Franchise Development is well-positioned to support your growth trajectory.

We offer a full suite of services to new franchise owners and established brands alike—ranging from franchise sales outsourcing to lead generation support to franchise consulting services. Contact us today to discover how you can elevate your brand with the team at Pinnacle.

How Franchisors Can Find Prospective Franchisees

May 23, 2023/in Franchise Growth/by [email protected]

There is a lot of great news for franchise brands and owners as we move toward the end of this calendar year. According to the International Franchise Association, franchise businesses are expected to increase by 15,000 units, adding approximately 254,000 new jobs to the nation’s workforce—outpacing pre-pandemic levels. So, the opportunities are out there, but how do you attract the right candidates? Experts at Pinnacle Franchise Development are here to help.

Try these five tips to grow your franchise.

Start With a Strategic Marketing Strategy

Your marketing strategy is a “road map” for attracting prospective sales leads and converting them into franchisees. It should include the four P’s:

Product: Identify the franchise brand, show why it’s compelling, and how it’s different from your competitors.
Price: Include estimated startup costs, including the initial investment, costs for real estate, supplies and equipment, advertising and marketing, and insurance.
Place: In the franchising world, location is key. Create a profile of the ideal franchise site based on demographics, competitors, and other market research.
Promotion: Describe how you communicate your brand message to consumers through advertising, public relations, social media and SEO content.

Having a clearly-defined brand identity and philosophy is critical before you search for franchisees. You can’t expect investors to “buy in” if they don’t understand who you are.

Tap Into Your Franchise Network

Current franchise owners are an excellent way to connect with new business owners. After all, a thriving franchise is your best advertisement. According to the Franchise Motivation Report, 94 percent of participants spoke with franchisees when considering opening a business.

Try implementing a referral program that encourages franchisees to find new leads and promote the benefits of franchise ownership in their immediate community as well as social and professional networks.

Perfect Your Sales Presentation

A confusing or lackluster sales presentation will discourage potential leads. Instead, keep your pitch simple, informative, and tailored to your audience. Be sure to answer all the questions investors have at this stage to keep the process moving. Your sale may lose momentum if you overwhelm them with data and buzzwords.

Promote Your Franchise on Social Media

Social media is ideal for promoting franchise opportunities. It requires minimal investment, and it yields big returns when it works. Keep in mind; users like to interact with brands. So when you post, be sure to respond to comments and answer questions in a timely manner. Hire a social media marketing team to manage your online presence if you don’t have time.

Leave it to the Experts

You may feel overwhelmed by the job ahead of you—especially if you’re running your own franchise. Help is available. Pinnacle Franchise Development offers comprehensive sales and support services for brands across all industries, including healthcare, beauty, retail, dining and more.

With a combined 50 years of experience in the franchise industry, our team offers comprehensive franchise sales outsourcing and franchise development services. We vet franchisees to match you with the highest-quality candidates and provide sales and marketing strategies to help you shine.

Most Popular Franchise Industries

October 21, 2022/in Franchise Growth/by [email protected]

One of the United States’ most significant contributions to the world of business is the franchising model. When John S. Pemberton began issuing licenses to sell Coca-Cola in 1886, he gave aspiring entrepreneurs a glimpse at the money-making potential of this industry. Today, there are nearly 800,000 franchise establishments in the United States alone.

What Is the Franchise Model?

Under the franchise model, an established business owner–called the franchisor–issues a license to another individual called the franchisee– to use their branding, business model, and trademarks. In exchange, the franchisee typically agrees to pay the franchisor a royalty fee and a percentage of their sales revenue.

Top Franchise Industries

Franchising has proven to work exceptionally well in the following industries:

Food and Restaurant Franchises
Many of the most well-known franchise brands, such as Coca-Cola and McDonald’s, operate in the food and restaurant industry. With many restaurants, the replicability of the food and its preparation lends itself well to this model. In addition, providing a quality, uniform product across a restaurant’s franchise locations allows it to build a broad and loyal customer base.
Vending Machine Franchises
Vending machines have a significantly lower investment than many other franchise businesses. Therefore, many savvy entrepreneurs diversify their income stream by investing in this type of franchise. And since vending machines can be placed almost anywhere, it is considerably more flexible than other industries.
Senior Care Franchises
Senior care is a rapidly growing sector in the U.S. economy. An article in Forbes states that a large portion of the 67 million Americans over 60 need care, and with 10,000 baby boomers turning 65 every day, that number will grow. Senior care is a complex business because it is an industry that has unique healthcare needs. That’s one reason why senior care franchises are popular–the franchisor has already worked out the issues and complexities in the business plan.

Most Profitable Franchise Industries

Some franchises can be immensely profitable, particularly if they have a well-established brand and market share. Some of the most profitable include:

Fast Food Restaurants
Many of the most popular restaurants in the nearly $300 billion fast food industry generate impressive revenue yearly. However, fast food is also a notoriously difficult industry to enter for startups. As a result, many entrepreneurs choose to open franchises with already-established restaurants.
Education Franchises
As a result of the impact the COVID-19 pandemic had on education, the education industry is expected to grow at a 10.7% compound annual growth rate in 2022. In addition, these service franchises are often incredibly profitable due to low operating costs.
Hair Salon Franchises
The hair salon market grew 19.6% as COVID-19 began to wind down in 2022 after falling precipitously when the pandemic started. Hair salons are among the most profitable service franchises due to their low operating costs and high retention rate.

Discover Franchising With Pinnacle

Pinnacle Franchise Development has helped numerous entrepreneurs invest in and grow franchise businesses in many of the most profitable and popular industries, including senior care, hair salons, retail, restaurants, and more. Our team has over 40 years of combined experience and can provide franchising services to assist you with everything from marketing and branding to lead generation.

Whether you would like to grow an existing business or learn more about one of our strong franchise brands, contact our franchising experts to find out how we can help you.

Why Franchising Is Growing in Popularity

October 6, 2022/in Franchise Growth/by [email protected]

After working hard to grow your business and make it successful, you’re beginning to think about setting up a franchise. Franchising has always been a popular way to expand a successful business beyond its original geographic footprint, with good reason. Business owners simply can’t run dozens of locations, but offering franchise opportunities to other aspiring entrepreneurs is good business sense. It’s a great time to work on setting up – or purchasing – a franchise, as this business model continues to grow in popularity.

The popularity of franchise business models

Franchise models are popular among both franchisors and franchisees. For franchisors, this model allows for virtually limitless growth and skyrocketing revenue without worrying about taking on debt in order to fuel that expansion. Franchisors are using the financial resources of the franchisees in order to expand the company while limiting their own potential liability. Furthermore, business owners who decide to set up multiple locations on their own are faced with the unpleasant task of trying to hire, train, and retain managers to operate those locations. In contrast, franchisees are already highly motivated individuals who want their locations to succeed.

For franchisees, choosing to buy into an established brand is a no-brainer compared to attempting to launch a new brand on their own. The established brand provides them with instant name recognition, extensive marketing capabilities, a proven system, and training resources.

How have franchises fared during pandemics and recessions?

For these reasons and more, franchises have been growing in popularity for quite a long time. In recent years, all types of business owners have faced challenges due to the pandemic and the threat of a recession. Yet, the franchise business model has held strong. Consider the following statistics from the 2022 Franchising Economic Outlook report published by the International Franchise Association.

• In 2021, franchise output grew by over 16% for a total of nearly $788 billion.
• In 2021, franchisees increased their hiring by 8.8%, adding more than 46,000 jobs to the economy per month.
• In 2022, the growth rate for franchise locations is expected to be 2.2% (over 792,000 franchise locations compared to about 775,000 in 2021).

It’s clear that franchise businesses have rebounded well from the pandemic, when many franchise restaurants, retail stores, and other types of businesses had to shut their doors or operate under reduced/modified circumstances. How exactly have franchises proved so resilient to adverse conditions? One reason is that, unlike individually owned businesses, franchise businesses share one thing in common: robust, well-established, time-tested infrastructure. Because of this, franchise businesses can withstand not only pandemics, but also economic recessions.

You’ll still need expertise to make your franchise business successful

As popular as franchises are these days, they still require quite a bit of work to set up and market successfully. For best results, contact franchising experts who can provide franchising services ranging from consulting to lead generation to marketing and beyond.

Pinnacle Franchise Development offers a full spectrum of services to elevate franchise brands. Contact our experienced industry professionals today to find out how we can help fuel your success.

How to Manage Labor and Food Costs While Growing Your Franchise

September 14, 2022/in Franchise Growth/by [email protected]

It’s no secret that food prices have been rising significantly. There are several major factors fueling inflation and the sharp increase in food prices, including the pandemic, supply chain disruptions, and increased fertilizer and fuel costs. The Russian invasion of Ukraine has jeopardized the global supply of grain, sunflower oil, and other core commodities. All of this means that restaurant owners must cope with pricier inventory. On top of that, labor costs are also rising, thanks to the elevation in the cost of living.

Here’s a look at how you can continue to grow your restaurant franchise while keeping food and labor costs manageable.

Capitalize on the desire for quality

Surprisingly, the cost of eating at home has been soaring faster than the cost of dining out. You can take advantage of this and entice more people to eat out at your restaurants by helping them to justify the decision to dine out. One effective way to accomplish this is to sub in higher quality ingredients—and then advertise the adjustment. For example, if you sell burgers, offer a brioche bun instead of the usual white roll.

Launch new promotions

During times of high inflation, savvy consumers are always on the lookout for a great deal. Use the opportunity to craft new promotions in order to fill more seats. For instance, consider offering early bird specials to extend the peak dining hours.

Reduce portion size

Restaurants customarily provide diners with large, heaping plates of food, quite a bit of which ends up wasted. Consider reducing portion sizes slightly. If you’re concerned that your diners might be upset about the change, it may be helpful to purchase new, smaller plates and bowls that have a similar appearance as the old ones.

Substitute ingredients

Another option is to swap out certain, pricey ingredients for less expensive ones. Try to do so in a way that doesn’t draw attention. Alternatively, you may want to increase the portion of certain meal components that are less expensive (e.g., breadsticks) while decreasing the portion of the more expensive components (e.g., meats).

Raise prices, carefully

If your profit margins are still less than desirable, you may need to consider raising prices. Price changes are what consumers will notice most, so do so carefully. It may not be wise to raise prices on all menu items. Instead, consider testing an increase on a couple of the most popular items. If diners are already in love with those particular meals, they may be willing to continue ordering them despite the increase.

Manage labor costs with caution

By and large, restaurant employees are some of the hardest workers in our economy. They’re on their feet all day doing a demanding job and dealing with customers who may not always remember to use their manners. It’s crucial to pay restaurant employees well to help them cope with rising inflation. It’s not generally recommended to cut employee wages, as staff turnover can cost a restaurant franchise more money. Instead, consider the following:

Use POS technology to increase efficiency.
Crunch the numbers to decide if hiring delivery drivers is really worth the revenue that delivery orders bring.
Track peak service times for each day of the week to better inform your staff schedule, and make staffing adjustments as needed.

Would outsourcing franchising tasks alleviate your burden?

Pinnacle Franchise Development is comprised of a team with over 40 years of combined experience in the franchise industry. We provide outsourced franchising services to all types of businesses, including companies that are just beginning to explore the franchising process and those that have been established for many years. From franchise lead generation to sales development to marketing, our talented team will elevate your brand and drive you toward greater success. Contact Pinnacle Franchise Development today to request a consultation.

Top Tips for Attracting the Right Franchisees for Your Concept

September 7, 2022/in Franchise Growth/by [email protected]

You’ve poured countless hours into growing your business, and now you’ve built it into a franchise system. Congratulations on preparing to take the next step in your entrepreneurial journey. One of the many hurdles to leap over will be attracting potential candidates who will become your franchisees. It’s important to note, however, that not every aspiring franchisee will be ideally suited to running a business, much less to running your particular franchise. While you’re working on franchise lead generation and marketing, keep in mind the following tips.

Develop your online presence

When aspiring franchisees research potential business opportunities, they do it primarily online. They’ll compare websites, requirements, and processes, looking not only for an opportunity that looks financially sound, but also for one that is transparent and clearly explained. It’s essential to curate your online presence, such as by developing web pages and downloadable materials that clearly articulate what is expected of franchisees and what sort of support they’ll receive from your company.

It’s particularly important to articulate your requirements, such as financial requirements, role of the owner,, or whether they need to be located in a particular territory.

Meet potential leads where they’re at

Although much of the work of researching a franchise opportunity is done online, many potential franchisees do still value the experience of attending industry conferences. Consider setting up a booth at a few conferences to network in person. Remember that flashy giveaways and gimmicks won’t draw in the most dedicated franchisees who are serious about starting a business. Instead, rely on solid presentations chock-full of vital details about your company. Consider signing up to do a workshop or a panel, as well.

Invest in your corporate culture and support resources

There are lots of great franchise opportunities out there, including those with low overhead, reasonable initial investments, and excellent revenue prospects. You’ll need to find a way to set your company apart from the herd in order to attract the right franchisees. One effective way to do that is to focus on improving your corporate culture.

Put yourself into the shoes of a lead. What would you look for in a corporate culture? Chances are, you’ll be interested in one with a mission statement and set of values that resonates with you, as well as a company that is committed to the success of their franchisees. Focus on building strong support systems and resources for your franchisees, which may include back office technology and ongoing training opportunities.

Know when to ask for help

Although you can launch your own marketing campaign to draw in franchisees, you may quickly find that marketing alone takes much of your time, leaving little to spare for other essential steps in the franchising process. Know when to ask for help. Franchise sales outsourcing is an excellent way to tap into the expertise and experience of an established franchise development team, while simultaneously freeing up your own time for other important activities. Look for a franchise development company that has a robust franchise broker network as well as experience in the industry.

Grow your business with Pinnacle Franchise Development

With over 40 years of combined experience in franchising services, the team at Pinnacle Franchise Development is fully equipped to help your brand identify quality franchise candidates . We bring a strong franchise broker network to the table, along with extensive experience in the franchise industry. From start to finish, our team will manage the entire spectrum of the franchise sales process with each potential franchisee, including assistance in strategizing your franchise marketing.

Are you ready to leverage our expertise and network? Contact Pinnacle Franchise Development today to discuss the possibilities.

6 Pitfalls of Growing Your Franchise Too Fast

August 28, 2022/in Franchise Growth/by [email protected]

If your franchise is doing well, it can be easy to shoot for the stars and try to scale up at an accelerated rate. But expanding too quickly can end up causing problems, particularly if you don’t have the right support systems and infrastructure set up. Here are some issues that can occur if you grow your franchise too fast.

You can’t keep up with your finances.

When you establish your franchise business, you’re probably paying close attention to the numbers, watching your cash flow, and understanding your expenses. But when you start to expand quickly, it can be hard to track your spending, costs, and other financials, which may put you in over your head.

Too-heavy focus on sales.

While monitoring your sales and assessing your revenue is essential, if you’re focusing purely on growth, it could mean you’re neglecting other crucial parts of your franchise, such as operations, market analysis, or branding, which are all important to support your brand development. If you aim to expand at a more manageable pace, it can help to ensure alignment with your business model.

Negatively impacting your culture and brand.

Growing too fast without the right processes can impact your franchise culture, which can have a knock-on effect on your brand. The risk is that one negative experience can tarnish your entire franchise network. Establishing the proper onboarding, processes, and systems for your franchise locations can help keep your brand consistent.

Your business operations aren’t working.

The bigger you get, the more organized you need to be to ensure cohesiveness and teamwork based on your core values and principles. If your business operations are out of control, it may be because your growth happened too fast. What worked with just a few franchises may need to be substantially adapted to work for a much larger number.

Issues with quality control.

The standards you set when you first started your franchise business can slip when you expand too quickly. This slip is usually a result of established processes not being updated or because you haven’t had the time to spend with new franchise owners due to your rapid growth. It may be affecting one franchise location or many.

Unhappy customers.

Expanding too quickly can lead to customer complaints if your new staff hasn’t had adequate training, if items are out of stock because you can’t keep up with inventory management, or if the quality of your products has been affected. Each experience not only impacts that store but also impacts the success of current and future franchises.

How to succeed in growing your franchise

While franchise growth is an exciting part of your journey, it requires careful management. It’s essential to get your finances in order and ensure your customer service, operations, branding, marketing, and technology are in place and built to scale.

At Pinnacle Franchise Development, we specialize in helping franchise owners grow their franchises in a way that’s true to their core values and highly scalable. Our franchise sales outsourcing team works closely with our clients and offers a personalized approach. We’ll make sure your franchise is set up correctly for profitable expansion. We also have excellent relationships with franchise sales brokers and potential candidates, so we can help you find the right fit for your franchise.

At Pinnacle, we focus on helping our brands meet their franchise goals and exceed them. Contact Pinnacle Franchise Development today to find out about our franchising services can help grow your business successfully.

Strategies to Diversify Your Franchise Portfolio

August 21, 2022/in Franchise Growth/by [email protected]

If you’re an existing franchise owner interested in diversifying your portfolio, understanding what this means and accessing important investment tips is an excellent place to start before you invest in a franchise. Playing to your strengths and using your industry knowledge is also important. However, purchasing a franchise that offers diversification from your current investments or employment is just as crucial. That way, you’re not tied to one particular segment or industry in case there is a downturn in one specific sector.

Buying a franchise also gives you plenty of additional support to help establish your business, such as help with branding, marketing, and advertising. This can make it a wise investment because it is typically easier to get off the ground than to start your own business.

What is diversification?

Diversifying your franchise portfolio means you aren’t relying on one revenue stream or industry to be successful. Instead, a diversified portfolio means owning multiple franchises in various sectors and locations so that you’re appealing to a broad demographic of customers.

A diversified portfolio can also help strengthen your financial position to meet unexpected market or economic changes. It’s often stated that having a diverse financial portfolio helps to take advantage of opportunities and reduce risks. We can say the same about franchise portfolio diversification.
Strategies to consider for diversifying your portfolio
If you’re considering diversification but aren’t sure where to start, the following steps can help:

1 – Establish a franchise portfolio of non-competing brands

Creating a franchise portfolio of brands that don’t compete against one another is an essential strategy. It ensures you’re not competing for the best staff, the best contracts with the same suppliers, or competing in marketing and advertising spending. For example, owning two similar gourmet pizza franchises in the same city means competing for the same customers in the same location. Therefore, it isn’t the best use of your investment dollars.

2 – Look for complementary brands

While you don’t want to compete with your own franchises, there are opportunities in aligned brands. This can be a wise investment choice to leverage your existing knowledge of markets, operations, and target audiences.

For example, if you already own a service franchise, consider another home services franchise that doesn’t directly compete with your existing one. Perhaps it offers a supporting service or need for your customers. You may even wish to consider purchasing a franchise that allows for cross-promotion, such as a lawn care franchise concept and residential cleaning franchise concept where you can promote the new franchise with your current loyal customers. Other examples include building on existing themes, such as adding a fitness concept if you’re already an owner of a health food franchise.

3 – Look for similar operational models

Even across different industries, there can be similarities to look out for in operational models that may make it easier to oversee and manage while maintaining diversification. For example, adding a new franchise with a similar model means you can more easily understand and adapt to new systems. This is especially ‌relevant when considering new technologies that can be implemented across franchises to help streamline operations.

4 – Consider your passions and financial goals

Many people who find long-term success with franchise ownership are passionate about their business, whether it’s the product, service, or company values. So, considering your passions and values can be a respected part of your diversification strategy. Most importantly, though, it’s crucial to assess the numbers. Try to focus on the finances to ensure it’s a sound investment.

5 – Do your research

Hundreds of opportunities are available, so doing your research is vital. Depending on your risk appetite, it’s wise to look for well-established franchises with solid financial performance and a well-respected leadership team.

You may wish to consider reading franchise magazines, talking to other owners, or attending conferences when you’re looking to add a new brand to your portfolio. Also, look at the development of a brand over time and how it has responded to market changes. Monitoring growth can be an insightful way to determine if the brand is likely to remain relevant and continue to grow in future years–regardless of emerging technology or market changes.

6 – Opt for semi or fully absentee franchises

If you already own a single-location franchise, managing it takes time and effort. If you’re the owner-operator, you typically work long hours to ensure it is profitable, so looking for another hands-on franchise isn’t a realistic option. That’s why taking a different approach and considering a semi-absentee franchise for your portfolio is essential.

This type of franchise means you’ll hire a manager to take care of the daily business or look for one that doesn’t require on-site staff. Absentee franchises, such as vending machines, clothing recycling bins, laundromats, or car washes, practically run themselves.

Get the right advice

At Pinnacle Franchise Development, we offer a vast range of franchise brands that service various industries. We believe in the benefits of expansion, which can provide you with steady and predictable returns. Franchise growth is also typically less risky than other asset types. Because most are service-based, which many customers rely on, you’re likely to keep customers even in an economic slump–you’re well protected against market volatility.

If you’re interested in learning more about franchise development or any of our franchising services, contact our experienced team today.