23 September 2021

    You are looking for geographical growth, perhaps franchising interests you but do you have what it takes to become a franchisor?

     Franchising is a proven geographic growth strategy. However, it is not for everyone. There are several pillars to franchise success and without the presence of these business pillars, your chances of being a successful franchisor (I mean truly successful) are very limited. Here are 3 such pillars.

    Pillar 1: You are a company at the top quartile in terms of financial performance in your industry.

    This is the guarantee of an ability to market a business model that will allow a franchisee to succeed.


    With above average performance than the rest in your industry, you’ll be able to introduce fees (franchise fees are royalties and some other service fees) without killing the franchisee’s profitability. The intrinsic profitability of your franchise model will save you a lot of worries.

    In my opinion, a successful franchise model should produce financial returns equal to the industry average at minimum within at least 80% of existing franchises.

    In franchising, franchisees’ expectations are high. Put yourself in their shoes. They acquire a successful formula so they want performance.

    Pillar 2: Clear and perceptible differentiation in the customer’s eyes

    Being a “me too” in franchising will not allow you to attract a clientele of loyal customers, nor franchisees eager to join your brand. To succeed, you need at least one differentiating factor that is really noticeable to customers.

    This factor may be demonstrated by a different service offer from the competition. Products, technology or even marketing.

    For example: Our client Noble element is a manufacturer of exposed wooden beams, the main perceived difference is not in the beam (although the system is of superior quality) it is in the complete project support from design to delivery. Noble element has been able to create a different perceptible high added value with its customers and prescribers.

    Pillar 3: Attraction capacity beyond your local market.

    Let’s be clear, this pillar is extremely important. Your franchise must be able to transcend your local market. The idea behind this concept is that profitability for a franchisor comes from the number of franchises, therefore if your concept is not attractive to consumers outside your local market, you will be far too limited and will not have the ability to develop adequately to maximize your value.

    There are several other aspects to attracting a franchise but that will be for another time.


    Becoming a franchisor means deciding to grow by collaboratively involving “franchise partners” in your success so that they too can succeed. Mastering these 3 pillars is a good start and is proof of a solid foundation to be able to franchise. Of course, there is more but it’s a good start!

    Okay, agree or disagree let me know!  (Comment, this feed is a live debate.)

    And if you encounter issues that you would like to discuss with an expert who knows your reality since I have lived it as a CEO, I would be more than happy to do so.

    Contact me privately for a free strategic brainstorming session!

    No sales, just a session to reflect together on your growth and get to know each other.

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