How to run a successful franchise

Many factors contribute to franchise success. It starts with choosing a franchise with evidence of the franchisor’s support. The best way to do that is to do the necessary research and ask existing franchisees what they think of the franchisor’s initial and ongoing training and support.

While franchisor support is critical, the success of the individual outlet depends solely on the franchisee’s efforts. The franchisor may provide a proven recipe for a business, but the franchisee must execute the recipe and add the required action to run a successful franchise.

Each business is different, but some common factors contribute to running a successful franchise. These are some of the things to consider:

  • Owner-operator involvement is critical – A franchise is not a passive investment, and the owner has to be involved hands-on to ensure the business runs successfully. The success of franchising depends on the motivation and dedication of the franchisee, who is constantly striving for customer satisfaction and maximising sales by doing so.

  • Careful financial management – Franchisees would be well-advised to keep a cautious eye on cash flow. Developing a budget and reviewing the budget against the actual monthly income statement is a critical management task.

  • Benchmarking – Benchmarking is another financial tool to ensure the business stays on track. The franchisor is best placed to assist with this, as franchise consultants should have insights into the critical margins and ratios that contribute to successful franchises. For this reason, sharing the required financial reports with the franchisor staff is good practice to benefit from their advice and support. 

  • Effective staff management – One of a franchisee’s main tasks is ensuring that staff members are motivated and engaged in their work. Effective staff management requires constant check-ins and the designing of incentive programmes that drive productivity and profit.

  • Customer care – Franchises are responsible for customer care in their area. The best marketing is word-of-mouth; excellent customer service and care are the only way to promote that. Also, it’s easier to make money from repeat sales or customers, and satisfied customers will continue supporting a business in this way.

If you want to learn more about how to improve customer relations, you should read this short guide by Franchise Finder.

  • Adapting to changes in the market – The franchisee should constantly review changes in the market, including competitors and other developments that could influence the franchise’s success. It is best to share this information with the franchisor to work together on potential solutions. 

Although the franchisee is responsible for the success of the franchised outlet, the franchisor has a vested interest in the franchisee’s success. Constant communication with the franchisor and feedback on market changes, consumer preferences or financial challenges can enhance the franchisor’s insight into the business and its support.  


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